Naira Appreciates on Parallel Market, Closes at N475/$


By Obinna Chima

Brief relief came the way of the naira which has been under attack on the parallel FX market as it closed at N475 to the dollar yesterday, stronger than the N480 to the dollar it closed the previous day.
But THISDAY gathered that the nation’s currency had dropped to N490 to the dollar mid-day yesterday, before it closed at N475 at the end of the day.
However, on the interbank FX market, the spot rate of the naira dipped to N311.62 to the dollar, lower than the N305.31 to the dollar it closed the previous day.

THISDAY had yesterday reported effort by the Central Bank of Nigeria (CBN) to halt the sustained slide of the naira which had been under attack by currency speculators.
As part of efforts to halt the sustained slide of the naira, commercial bank customers this week received text messages from their respective banks notifying them of a recent regulatory guidance from the CBN on the use of their accounts.
The CBN mandated all customers of financial institutions to use their accounts only for direct personal or company-related transactions and to desist from engaging in any activity that could be perceived as international money transfer operations or bureau de change activities without its approval.

The aim of this directive appears to be geared towards improving foreign exchange supply to the interbank market by discouraging the growing use of personal domiciliary accounts for currency trading.
Commenting on the directive, CSL Stockbrokers Limited said: “Aside these measures, we maintain our view that the CBN needs to allow the naira to truly float freely – which it appears to not be, judging by the increasing spread between the parallel and official markets – for the currency to adjust to a level where demand and supply can and will be balanced.”

The President, Association of Bureau De Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe had argued that the current rate of the naira on the parallel market was not a true reflection of the value of the currency. He also attributed the development to the activities of speculators.