Naira Appreciates against the dollar in the Parallel Market

Contrary to the marginal losses of the naira to the dollar as witnessed from last week, the local currency appreciated at the parallel market yesterday. The dollar was exchanged for the naira at N152 against N154 last Monday, indicating a gain of N2. Should the trend continue, the traders said a convergence of the parallel and official market rates was possible within the next two weeks.

Naira had lost N1.03 to the dollar last Monday, been the first auction day in the bi-weekly Wholesale Dutch Auction System (WDAS). The local currency had closed last weekend at N147.38 to the greenback. Inter-bank foreign exchange rate was N152.50/$1 yesterday as against N152/$1 last Monday and N149.50/$1 last weekend.

The dealers said the black market was responding to the liberalisation of the market, which they admitted has enhanced the funding of that window.

The CBN had in furtherance of an efficient foreign exchange market liberalised the transactions. Among the steps taken, which operators said had buoyed the market especially the parallel segment include the Integration of both classes ‘A’ and ‘B’ BDCs to the official window.

The CBN is currently implementing cash sales to Bureaux de Change as a key component of the liberalised forex market.

It had announced that it would disburse foreign exchange to BDCs at the clearing rate of the immediate past WDAS session and that all BDCs were required to sell at no more than two per cent spread above the CBN selling rate.

That, the dealers said was also helping to moderate the rates at the retail end of the market. Meanwhile, rates at the inter-bank money trading remained within the region of last week. The Nigerian Interbank Offer Rate (NIBOR) for call was yesterday at 10.4588 per cent and the 7 day paper 12.4167 per cent.

The 30 day NIBOR was 14.6667 per cent; 60 day 15.6250 per cent; 180 day 16.9167 per cent and the 365 day fund 17.0838 per cent.