Naira remains N305.25/$1 at official window, slips to N500 at parallel market

The Naira on Friday closed at N305.25 to US dollar at the official window rate, the same rate it traded the previous day before the closure of the official foreign exchange market.

However, the local currency at the parallel market over the weekend slipped to 500 per dollar, finally giving up its position at 498 which it had held in the last three weeks.

The Pound Sterling and the Euro traded at N617 and N528 respectively at the open market.

At the interbank window, the naira was seen quoted by lenders at 315 to the dollar on Friday but remained stable at the bureau de change (BDC) segment of the market exchanging at N399 to a dollar, while the Pound Sterling and the Euro closed at N617 and N528, respectively.

Consequently, the naira is expected to trade within a decent range after the Central Bank of Nigeria (CBN) released around $660 million to ease the shortage of the greenback in Africa’s biggest economy.

“The pressure on the market has reduced slightly because of the recent dollar sales by the central bank to clear part of the backlog of demand and the regular sales to bureaux de change by Travelex,” one trader told Reuters.

On Wednesday, the apex lender sold dollars in a special auction aimed at clearing the backlog of dollar obligations of manufacturers, airlines, agriculture, and petroleum sectors.

The apex bank raised N177.22 billion via the sale on Wednesday of a one-year treasury bill but had to offer a yield well in excess of its benchmark interest rate to lure investors in the face of galloping inflation.

The one-year bill yielded 18.54 percent, in line with December’s 18.55 percent annual inflation rate but far higher than the central bank’s benchmark interest rate of 14 percent.

The auction on Wednesday was the third this year at which the central bank has offered the one-year bill at a yield of above 18 percent. The central bank had previously sold short-term debt at yields below inflation for months.