- Naira Extend Gains Against Dollar Across FX Markets
The Nigerian Naira extended its gains against the US dollar across the foreign exchange market on Tuesday.
The local currency improved N4.06 at the interbank market to close at N304.75, from N308.81 it traded on Monday.
Accordingly, the Naira gained N3 at the parallel market to close at N465, from N468 it closes on Monday.
While, at the Bureau De Change segment, the Naira was exchanged at N385 to a US dollar — in line with CBN directive.
Forex traders have attributed the improvement to the increase in the market liquidity due to the weekly sale of forex by Travelex and First Bank of Nigeria.
The First Bank of Nigeria and Travelex were approved by the CBN to help boost market liquidity through the sales of diaspora remittances to the Bureau De Change operators in an effort to curb counterproductive activities of some financial institutions.
The Naira has since gained N35 on the parallel market, from N500 it traded about a month ago and appreciated N16 in the interbank market to close at N308.81 on Tuesday.
Experts expect liquidity in the market to improve once OPEC goes through with Algiers accord on November 20 in Vienna, Austria.
“This, is because oil is forecast to trade at $60 a barrel after production cut, and with Nigerian output currently averaging 2.1m barrels a day. The country is likely to boost its external reserves needed to service the economy and prop up the Naira value through the CBN intermittent intervention in the foreign exchange market,” said analysts at Investors King Ltd.
“The reality is that as of today and this morning, we are at 2.1 million barrels production. That’s substantial,” said Emmanuel Kachikwu, Minister of State for Petroleum.
The pound and Euro were exchanged at N565 and N504 respectively.