Good News! Naira Moves up, Gains Against Dollar – See New Rates

The naira appreciated against the United States dollar at the
parallel market on Monday to 217, from 221 recorded on Friday.
The naira rose on the back of weak demand for the dollar at the
foreign exchange markets.
Forex traders linked this to an improved dollar liquidity
occasioned by the sustained sales of the greenback by the
Central Bank of Nigeria.


Reacting to the rising fortune of the local currency, the Acting
President, Association of Bureau De Change Operators, Alhaji
Aminu Gwadabe, said, “The market has started feeling the effect
of the dollar sales by the central bank in the last two weeks and
tight measures introduced to prevent cross boarder currency
trafficking.”
The CBN had increased the frequency of dollar sales to the BDC
operators two weeks ago to twice-weekly from the usual once a
week previously in a move meant to increase liquidity in the
market and support the local currency.
Traders said bank customers were no longer willing to hold
dollars after the central bank banned dollar cash deposits into
domiciliary accounts.
“We expect to see more rallies in the market if the central bank
could sustain its support for the naira,” Harrison Owoh, a
bureau de change operator said, Reuters reported.
The naira was unchanged at the official interbank market at 197
to the dollar, where the CBN has maintained a tight control by
pegging it to the rate of 197 to the dollar
The naira had weakened on the parallel market to as much as
245 to the dollar last month, on persistent dollar demand after
central bank limited importers’ access to dollars on the official
interbank market to buy a wide range of goods, in order to save
the external reserves.
The local currency later rebounded to 216 at the parallel market
as Deposit Money Banks started rejecting cash deposits in
dollars a few weeks ago.
The naira had, however, weakened to about 223 last week
before rising to 217 on Monday
Analysts expect the naira to continue rising, saying it is good for
the economy.
The Head, Investment and Research, Afrinvest West Africa, Mr.
Ayodeji Ebo, had said that the gains made by the naira was
good for the economy, adding that it would help the CBN to
gauge the true value of the currency in the event of a possible
devaluation in the near future.
“If there is a convergence between the interbank and parallel
market, the CBN may possibly review its restrictions imposed on
the forex market,” he added.
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said if
the trend continued, the naira might rise to as much as 200
against the dollar.

– PUNCH