Naira Extends Gain on Parallel Market, Now $449/$1

Nigerian naira
  • Naira Extends Gain on Parallel Market, Now $449/$1

The naira appreciated further on the parallel market yesterday to close at $449 to the dollar, stronger than the N453 to a dollar it closed the previous day.

But the buy rate of the greenback appreciated to $445 to the dollar yesterday.

This is just as the country’s external reserves defied flunctuations in prices of crude oil in the international market and continued on the path of growth. The latest figures from the Central Bank of Nigeria (CBN) showed that the country’s external reserve was at $30.304 billion as at Thursday. At its current value, the external reserve has grown by $4.461 billion year-to-date.

The CBN had on Thursday said it had offered and received bids for $100 million from authorised dealers in the interbank market to meet the requests of genuine customers. The CBN spokesman who disclosed this had explained that the sales would be settled yesterday (Friday). He, however, disclosed that no intervention was made by the Bank to meet requests for invisibles on Thursday.

Okorafor reiterated that the CBN would continue to make necessary interventions in the interbank market to meet all legitimate transaction-based foreign exchange demands by customers.

The CBN had on Wednesday sold of a total of $150 million through foreign exchange (FX) forwards. During that auction, the highest bid rate was N335/$1 and the marginal rate was N320/$1. Okorafor had also said the highest rate of N335 was the same as the last auction rate of March 8, 2017. He, however, added that there was a change in the marginal rate from N315/$1 during the last auction to Wednesday’s marginal rate of N320.

Speaking further, Okorafor expressed confidence that the pressure hitherto faced by both small and big-end users will be totally overcome soon.

It will be recalled that the CBN, in the past few weeks, has been making offers and releases to the inter-bank foreign exchange market in its bid to sustain forex supply to different categories of users. The latest FX offer by the CBN took the total intervention since the changes to its FX policy was announced last month to $1.715 billion.

Also, Travelex with the approval of the central bank on Thursday sold a total of $25 million to 3,124 Bureau De Change (BDC) operators. The development also helped to improve the volume available to sell to retail customers. The President of the Association of Bureau De Change of Nigeria (ABCON), Alhaji Aminu Gwadabe, said Travelex sold the dollars to his members at N381 per dollar.

Oil prices finished with a modest loss on Thursday, a day after a big rally, as rising output from the U.S. remained a threat to efforts by other major producers to rebalance the market.

West Texas Intermediate crude oil edged down by 11 cents to settle at $48.75 a barrel after rallying by 2.4% on Wednesday. Also, Brent crude shed seven cents to $51.74 a barrel.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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