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Naira drops at official forex, parallel markets

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CBN resisted pressure to float the Naira – Spokesman
The Nigerian currency, Naira, on Friday through to the weekend extended its woes against the US dollar and the other two major foreign currencies, as it dropped further at both the official foreign exchange and parallel segment of the market.
 
After recording a rebounded rate at the Nigeria Autonomous Foreign Exchange Fixing (NAFEX) window a day before the closure of the official forex market, the Nigerian currency, Naira, on Friday relapsed against the US Dollar, as well as shedding 0.02 per cent at the Central Bank official rate.
 
The local currency, had on Thursday ended its woes against the dollar, following a three day low trading during the week under review, before gaining a total N4.50k to close at 355.55 per dollar on Thursday compared to 359.60 traded on Wednesday, but surprising relapsed on the last trading of the week to record a closing rate of 359.56.  However, fell to 359.56 to the Greenback to end the week on a downward trend.
 
Although, it had earlier registered a total gain of 0.025 per cent at 360.63 per dollar which was an open rate at the forex window, against 361.38 opened on Thursday and 362.97 that was seen in the previous day, FMDQ OTC data has showed.
 
However, the daily turnover at the Investor and Exporters FX window, improved significantly by $67.12 million of the new figure of $213.21 million, while compared to $146.09 million traded on Thursday, as well higher thanWednesday $100.29 million, Tuesday $165.29 million and stronger than $212.43 million recorded on Monday, representing the highest turnover for the week, even though it was weaker than $236.97 registered the precedingFriday, while considering on a week-on-week (w-on-w) basis.
 
 
Also, the naira, at the official forex market dropped further to 305.80 per dollar compared to Thursday, Wednesdayand Tuesday flat rate of 305.75 and weaker than 305.65 sold last Monday and 305.60 exchanged previous Friday(w-on-w).
 
It however, recorded slight or no changes at the parallel market, as the local currency was seen hovering between 369 and 370 to the dollar, while remained steadied at 475 against the pound sterling and also, retained depreciated rate of 432 per Euro against 431 traded the previous day.
 
Meanwhile, the continuous weekly intervention in the foreign exchange market by the Central Bank of Nigeria (CBN) has been described by many finance experts as unsustainable, even though the apex bank had reiterated that it is in better position to do that due to the current level of the nation’s external reserves.
 
Commenting on this, an Associate Professor, Nasarawa State University, Dr. Uche Joe Uwaleke, said that the CBN intervention is being made possible due to the fact that the foreign reserves have been on the rise recently and the accretion in the reserve is what has empowered the central bank to be able to intervene continuously.
 
He explained that the accretion has been a function of the increase in the international oil price, as well as the improvement in output in the wake of the relative peace in the Niger Delta region.
 
According to him, the CBN is now in a convenient position to supply forex to the market, which is why it has said that banks should open outlets across the airports and should even have special teller points to attend to those who are in need of Personal Travel Allowances (PTA) and to those who also need forex for school fees abroad.
 
“With favourable condition in the international oil market, I strongly feel that the CBN will continue to intervene because the intervention is in the interest of the Nigerian economy”, he explained.
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