- Naira Gains on Parallel Market for Four Consecutive Days, Now N480/$
The Naira extends its gain against the US dollar on Thursday for the fourth consecutive day.
The local currency gained N21 from N501 it traded on Wednesday to close at N480 to a dollar. Bringing its total gain in a week to N40 after reaching all-time low of N520 on Monday.
On Monday, the CBN had announced a new forex policy actions to cater for categories previously excluded from the official forex rate and increase forex liquidity in the market.
The apex bank has since sold $370 million in an auction, forward contracts, and also appropriated a weekly $20 million to commercial banks at N375 to a dollar for school fees payment, medical bills and personal travel allowance.
According to the traders, the buy rate strengthened to N470 per dollar, from N490/$ it closed on Wednesday. This was after the CBN reportedly auctioned another $230 million through forward contracts on the interbank market.
Experts have said the continuous rise of the foreign reserves has strengthened CBN position but insisted sustainability is the key to economic recovery.
“The effectiveness of the new policy depend on sustenance, while sustenance depends on continuous foreign exchange generation through the sales of crude oil,” said Samed Olukoya, a foreign exchange research analyst at Investors King Limited. “Another attack on any of the pipelines could disrupt the whole policy and hinder the nation from a progressive economic recovery,” he added.
