Naira Watch: Naira rises to N420/$

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The Naira, Tuesday, appreciated further to N420 per dollar in the parallel market prompted by increased dollar supply and declining demand.

Vanguard investigations revealed that the parallel market exchange rate, which closed N430 per dollar on Monday, dropped by N15, yesterday, to N420 per dollar. Consequently, the Naira has appreciated against the Dollar by N25 or 5.6 per cent, this week.

According to a Bureaux De Change (BDC) chief executive, who spoke on condition of anonymity, the market is experiencing boost in dollar supply due to the sustained intervention of the CBN in the foreign exchange market.

Also confirming this development, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe said this trend will continue provided the apex bank sustains its intervention in the interbank market. He however urged the CBN to also consider increasing weekly dollar sale to BDCs as well as aligning the exchange rate at which they purchase the dollar to the rate at which the CBN sells to the banks. The CBN sells dollars to BDCs at N381 per dollar while it sells to banks at exchange rate ranging from N315 to N360 per dollar.

Since Monday February 20th 2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has injected $2.26 billion by intervening in the forex market 11 times as follows: Tuesday February 21st, $417 million; Thursday February 23rd, $231 million; Monday February 27th, $180 million; Friday March 3, $350 million; Monday March 6, N367 million; Tuesday March 7, $100 million; Thursday March 9, $170 million; Tuesday March 14, $190 million; Wednesday March 14, $150 million; Thursday March 16, $100 million and Monday March 20, $143 million.

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