The Naira has dropped to 351
Naira to a US dollar from between 346 and 348 Previous rates in the black market while the
current interbank rate stands at 281 Naira to a dollar,
The President, Association
of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, in an interview
with Punch, said the Naira dropped to 351 at the parallel market from between
346 and 348 due to persistent liquidity issue.
He said, “Lack of liquidity
in both the interbank and parallel markets is what is affecting the naira exchange
rate to the dollar.
“Right now, the only thing
that the market is scavenging for is the export proceeds. There is a liquidity
crisis.”
Asked if demands have
shifted away from the parallel market as a result of the new forex policy,
Gwadabe said, “How can demand shift away from the parallel market when you have
about 41 items that cannot obtain forex from the official market? You cannot
completely kill the black market, you can only formalise it.”
The Central Bank of Nigeria,
which has been intervening in the interbank market since it abandoned its peg
of N197-199 to the dollar, asked for bid-offer quotes from currency traders on
Monday as it sold dollars at the interbank market to boost liquidity according
to Reuters .
After abandoning the Naira’s
16-month old exchange rate peg a week ago, the central bank sold dollars at an
auction to clear a backlog of demand and keep markets active.
It sold an undisclosed
amount of dollars on Monday. However, the interbank market traded a total volume
of $32m just before the market closed, which traders attributed to the central
bank’s intervention.
Nigeria’s interbank market
has traded for six days after the central bank forex reforms. Traders are
expecting substantial currency flows from oil companies and exporters to start
to trickle in from this week, they said.
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