Naira Recovers Against the Dollar in the Parallel Market...See Current Value

There are strong indications that the efforts of the Central Bank of Nigeria (CBN) to stabilise the naira may have started yielding the expected results according to the Leadership.

A CBN official last week noted that the deployment of a number measures by the bank may have turned the tide in the foreign exchange (FOREX) market and led to the severe punishment suffered by currency hoarders and speculators.

The CBN had earlier insisted that speculators were behind the market bubble since the upper week which dealt negatively on the naira, sending it down to an all-time low of almost N400 to the dollar.

The CBN governor, Godwin Emefiele, had accused speculators who connived with bureau de change operators to undermine the efforts of the bank of propping up the naira and warned that such speculators would eventually be punished by the market. Last week, it became apparent that the recent depreciation of the naira was not as a result of genuine demand but the insatiable urge of speculators, many of whom had got burnt in the sharp appreciation of the naira.

The value of the naira which started the week at N367 rose to N350 by Tuesday and N305 by Wednesday. There had been a wide gap between the selling price and the buying price on Wednesday.  Money changers bought from customers at N270 per dollar but sold at average of N305 per dollar.

A bureau de change operator explained that the wide gap between the buying rate and selling rate was due to the attempt by operators to minimise their loss.

He said, “People had bought when the rate was N370, and they are already making losses. But by combining dollars bought at N270, the average buying rate becomes N320. So at N305, they are still losing about N15 per dollar.”