BUSINESS
Official rate: Naira crashes by 3%, steady at parallel market
The injection of $195 million by the Central Bank of Nigeria (CBN), on Monday, has failed to strengthen the nation’s currency, Naira, from the official rate of 305.9 sold on the first trading day of the week, compare to the closing rate of 315 per US Dollar recorded on Tuesday, representing a decline of 2.9 per cent, data obtained from the official FMDQ website has revealed.
The apex bank, on Monday had intervened in the official forex market with the supply of $195 million as part of efforts to stabilise the market, but to the surprise of forex dealers, the naira, depreciated but remained unchanged at the unofficial segment of the market.
At the parallel market, the local currency, remained unchanged at 367 to a US Dollar but relapsed against the Euro to close at 420 compare to 417 traded on Monday, however, steadied at 470 to a Pound Sterling.
The Naira, at the Investors and Exporters FX window, opened at 365.21 per dollar against 365.57 opened on Monday and closed at 363.57 compare to 362.21 exchanged on Monday.
Although, at the interbank forex market, the currency closed on Tuesday at a better rate of 323 against 324.50 to a dollar against sold the previous day, but appreciated to 420.64 against 424.12 traded to a Pound compare to 419.74, and dropped to 372.90 against 370.24 exchanged on Monday.
Meanwhile, the Acting Director, Corporate Communications of the apex bank, Isaac Okorafor, in a statement, said $100 million was offered through the wholesale segment.
He said that Small and Medium Enterprises (SMEs) segment received $50 million, while tuition fees, medical payments and Basic Travel Allowance, BTA, among others, got $45 million.
Mr. Okorafor said that the CBN was pleased with the state of the market, and assured that the bank would continue to intervene in order to sustain liquidity in the market and guarantee international value of the naira. He said the apex bank remained determined to achieve its objective of rates convergence, “hence the unrelenting injection of intervention funds into the foreign exchange market.”
Mr. Okorafor expressed optimism that the naira would sustain its run against the dollar and other major currencies around the world, considering the level of transparency in the market.
He, therefore, advised stakeholders to abide by the guidelines to ensure transparency in the market.
Last week, the CBN intervened in the various segments of the foreign exchange market with the injection of $396.8 million. Consequently, the apex bank in a bid to achieve official and parallel market rate convergence sold a total sum of $2.64 billion to authorised dealers in May 2017. The bank latest economic showed that 70.8 per cent and 106.1 per cent increase above the levels in the preceding month and the corresponding period of 2016, respectively.
This development, however, attributed to the increase in inter-bank sales, matured forwards contracts and Bureau De Change (BDC) sales during the period under review.
“Of the aggregate sales, forwards contracts disbursed at maturity were valued at $1.85 billion or 70.1 per cent of the total, while inter-bank sales amounted to $0.65 billion or 24.7 per cent. The balance of $0.14 billion or 5.2 per cent of the total was accounted for by sales to BDC”,the CBN’s report stated.
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