- Parallel Market Rate Falls to N378 as Speculators Lose More
At last, the Naira was exchanged at the parallel market yesterday at N378 to a dollar in over seven months, punishing more speculators, barely one month after the currency hit a record low of N520/$.
Again, with the Naira gaining stability at all ends, there is a renewed optimism that the desire of the Central Bank of Nigeria (CBN) to achieve rates convergence between the Interbank and the BDCs markets appears to be in the horizon.
With yesterday’s record, the local unit gained about one per cent over Thursday’s transaction at N380/$ in a move that has seen the currency rebound gradually and steadily in the last three weeks.
At the current rate, the spread between parallel and the new official (retail) segment of the market, where intervention is done at N375/$, stands at N3. The CBN had last month unveiled a new policy that deregulated the retail segment of the forex market, which allowed access to travel allowances, school fees and medical tourism.
Besides, it has intervened persistently in both the interbank and forwards contract market with over $1.5 billion since the new policy, which now crashed the parallel market rate.
CBN Governor, Godwin Emefiele, on Tuesday warned speculators that the bank had perfected plans to ensure that exchange rates fall beyond their expectations.This week, the bank intervened with $180million on Monday, $500million on Tuesday and $100million on Thursday, in both 60-day forward market and interbank.
But yesterday, it ended the weekly transactions with $100million offer at the interbank market to meet customers’ demands, out of which authorised dealers were only able to pick $81.347million after an initial bid for $91million.
At the interbank market, usually called the official market, the Naira exchanged for N307/$.Acting Director of Corporate Communications at the CBN, Isaac Okorafor, attributed the inability of authorised dealers to pick up the entire CBN offer to increasing dollar supply and sense of apprehension among dealers, who anticipate a further crash in the rate of the dollar.
He reiterated the determination of the apex bank to sustain its current interventions in the market, adding: “Those who doubt the capacity of the bank to sustain the intervention in the market are beginning to have a change of mind.”
Naira Declines Slightly on the Black Market to N474/$
Naira Drops Marginally on the Black Market to N474 Against US Dollar
Nigerian Naira declined marginally on Tuesday on the parallel market, popularly known as the black market.
The local currency declined by N1 to N474 per US dollar, down from the N473 it traded on Monday.
This was coming after Shoprite announced it would be exiting Nigeria, Africa’s largest economy. The announcement further damped the nation’s economic outlook amid the already heighten economic uncertainties.
Nigeria continues to struggle with low dollar availability after low oil prices and weak global demand for the commodity eroded the nation’s foreign revenue generation.
On the Investors and Exporters Forex window, the Naira remained pressured at N389 to a US dollar, better than the N389.25 it exchanged on Monday but more than the N381 stipulated by the Central Bank of Nigeria.
Total turnover traded by investors rose from $18.83 million traded on Monday to $24.66 million on Tuesday.
Experts have said the series of bad news emanating from the country will continue to deter potential investors and hurt capital importation necessary to boost dollar liquidity.
Forex Scarcity Weighs on Manufacturing Sector
Manufacturing Sector Suffers from Lack of Dollar Liquidity
The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, has said lack of dollar availability continues to weigh on the manufacturing sector in the first half of the year as the sector recorded its third consecutive month of contraction in the month of July.
According to Yusuf, several manufacturers had to source for forex on the black market, increasing scarcity on the already stressed section of the forex even more. This, other experts have blamed for the high Dollar-Naira exchange rate on the black market.
On Monday, the Naira was exchanged at N473 to a US dollar on the parallel market popularly known as the black market. The local currency gained N2 from the N475 it was exchanged before the Sallah holiday to N473 on Monday when the market opened.
“Across, practically, all sectors, we are experiencing cost escalation, loss of credit lines enjoyed from foreign creditors, forex remittance challenges and many more. We need an urgent response from the CBN to calm the situation and restore confidence in our foreign exchange management framework,” Yusuf stated.
The Lagos Chamber of Commerce and Industry said most of its 2,000 members have been hit by the dollar shortage and wide foreign exchange rate that is presently eroding their profits.
“If the situation persists, it will lead to lay-offs. If you are not producing, there will be a shortage of goods in the market, prices will go up,” he added
Naira Gains N2 Against US Dollar to N473 on Black Market
Naira Gains Against Dollar to N473 on Black Market
The Naira gained slightly on the parallel market, popularly known as the black market, on Monday to exchange at N473 per US dollar.
The local currency traded at N475 to a US dollar on Friday before gaining N2 to N473 on Monday.
This is coming on the back of dollar scarcity caused by falling foreign reserves and low oil prices.
Against the British Pound the local currency declined by N5 from N585 it traded on Friday to N590 on Monday.
This continues against the Euro single currency as the Naira depreciated by N2 to N542, down from N540 it traded on Friday.
On the Importers & Exporters Forex window, the Nigerian Naira exchanged at N389.25 against the United States dollar, slightly below the N388.33 it opened on Monday.
Investors traded $18.83 million during the trading hours of Monday on the I&E FX window.
The Central Bank of Nigeria’s exchange rate remains N381 to a United States dollar.
The apex bank had adjusted the local currency foreign exchange rate twice in the last few months to ease the pressure on the nation’s dwindling foreign reserves.
Still, the inability of the apex bank to improve the supply of the US dollar into the economy continues to weigh on the Naira value and general economic activities.
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