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Naira stabilises at official, unofficial forex markets

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Speculative attacks fuel Naira depreciation

The Nigerian currency, Naira, on Tuesday opened the official foreign exchange trading week at 365 to the dollar in the parallel market, but rebounded slightly on Wednesday at 364 gaining a point, however, relapsed to 365 the following day, even as it stabilised for the week at 365 to the Greenback over the weekend.

The naira, had traded for just four days during the week under review at the official forex market at 305.90 per dollar, representing a drop of 0.05 while compared to the last trading day figure of 305.85 before going for the two days holiday in the previous week.

It was also, seen sustaining gains recorded on Thursday against the pound sterling at 470 compared to 472 it stood within the week, as well as 432 exchanged per euro, even though it was weaker than Tuesday closing rates of N470 and N430 traded respectively at the unofficial market.

However, the local currency, on Wednesday retained the previous day traded rate of 305.90 against the dollar, despite the effort by the Central Bank of Nigeria (CBN) to boost liquidity in the system with injection of fresh 250 million dollar. But instead of appreciating, it was surprisingly extended its losing streak on Thursday to close at 305.95, even though it eventually stabilsed at 305.95 on the last trading day of the week (Friday).

On the contrary, the naira, extended its gaining streak at the Nigeria Autonomous Foreign Exchange Market (NAFEX) window, with total gains of 0.33 per cent to close the week 358.50 against 359.70 sold on Thursday and Wednesday 360.39 per dollar.

Although, the autonomous FX window, began last trading day of the week àt a weaker rate of 359.66 per dollar, compared to 358.66 on Thursday and Wednesday 359.96 to the dollar.

But while considering the Friday’s NAFEX window turnout, it showed a significant growth of $133 million to settled at $131 million against $100.33 million recorded the previous day and $195 million stood on Wednesday.

The naira, at the bureau de change (BDC) window saw the naira closing at N362 to the dollar, while the pound sterling and the euro traded at N470 and N430.

On its part,, the apex bank in the country has continued to inject more foreign exchange into the forex market in order to ensuring availability of liquidity in the market.

Meanwhile, the central bank has said the local currency in circulation in the month of August stood at N1.86 trillion, representing 5.6 per cent increase over N1.76 trillion in July,

The N1.86 trillion currency in circulation is the third lowest, after N1.76 trillion in July and N1.87 trillion in June as the apex bank continued to mop up excess liquidity in a bid to reduce money supply in the nation’s economy.

The currency in circulation, which is the physical money used for transactions between consumers and businesses, had opened 2017 at N1.99 trillion and closed in February at N1.97 trillion.

The larest apex bank report showed N1.98 trillion and N1.97 trillion was in circulation in March and April respectively, indicating CBN’s consistent mop up of liquidity in the system.

The data on CBN website revealed that currency in circulation moved to N1.89 trillion in May.

The CBN economic report for May stated that, “Currency in circulation, at N1.89 trillion, fell by 3.9 per cent in the review month, compared with the 0.4 per cent decline at end April 2017.

“This was due to the 5.4 per cent fall in its currency outside banks component,” the report by CBN explained.

The report further said, “Total deposits at the CBN declined by 1.2 per cent to N11.5 trillion at end-May 2017, as a result of the fall in both Federal Government and banks’ deposits, which more than offset the increase in private sector deposit with the CBN.

“Of the total deposits at CBN, the shares of the Federal Government, banks and the private sector were 47.7, 31.2 and 21.1 per cent, respectively.”

The apex had said N1.9 trillion currency was in circulation for month ended November.

According to our correspondent investigation, the N1.9 trillion reported by CBN was the highest naira in circulation reported in 2016.

Oriyomi Olamiposi

NEWSVERGE, published by The Verge Communications is an online community of international news portal and social advocates dedicated to bringing you commentaries, features, news reports from a Nigerian-African perspective. A unique organization, founded in the spirit of Article 19 of the Universal Declaration of Human Rights, comprising of ordinary people with an overriding commitment to seeking the truth and publishing it without fear or favour. The Verge Communications is fully registered with the Corporate Affairs Commission of the Federal Republic of Nigeria as a corporate organization.

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