Naira Gains Momentum, Appreciates To N660/$1 In Parallel Market

The naira yesterday continued its recovery on the parallel market, appreciating to N660 per dollar a few days after security operatives raided Bureaux De Change (BDC) hub in Abuja.

The nation’s currency had depreciated to about N715 to a dollar on the parallel market last week.

On the official market side, the naira appreciated by 0.03 percent to close at N428.88 to a dollar on Monday, according to data on FMDQ OTC Securities Exchange, a platform that oversees official foreign-exchange trading in Nigeria.

Last week, operatives of the Economic and Financial Crimes Commission (EFCC) raided Wuse Zone 4, Federal Capital Territory, Abuja, over allegations that some Bureaux De Change (BDC) operators are mopping up foreign currencies.

“The raid by EFCC in Abuja BDCs last week dampened demand,” a source told TheCable.

“There were large buyers last week that many had to queue up!

“The current situation tells you that if you allow the market to work, it will find its level. We were blaming aboki fx before.”

President of the Association of Bureaux De Change, Aminu Gwadabe said, the “market surveillance” was done in collaboration with the association.

“We have a cordial relationship with the security agencies and ongoing collaboration with the agencies on the exchange rate issues,” he said.

The Central Bank of Nigeria (CBN) regularly intervenes in the official foreign exchange market to maintain stability.

Last week, Osita Nwasinobi, spokesperson of the CBN, said the apex bank would continue to make deliberate efforts in the forex sector to avoid further downward slides in the value of the naira.

He further advised forex buyers not to succumb to speculative activities of some players in the FX market to save the naira from further decline.

While the pressure on the naira has both local and global perspectives, there has been unabating demand for forex for both goods and services, thereby creating a demand challenge. The deteriorating security situation in the country had also battered investor confidence and affected forex inflows into Nigeria, just as the rising petrol subsidy cost and oil theft were hurting the economy.

However, despite the significant reduction in FX inflows, the CBN has attempted to address the challenge through policies such as the RT200 FX Programme; 100 for 100 Policy on Production and Productivity; Naira4Dollar Scheme; the Anchor Borrowers’ Programme (ABP); Export Development Facility (EDF); and the Non-Oil Export Stimulation Facility (NESF).

These initiatives of the CBN had been aimed at diversifying the economy; stimulating production; enhancing FX inflows; maintaining the stability of the naira against other currencies; and reducing FX demand pressure.