Naira appreciates at official FX market steadies at parallel market

The Nigerian currency, Naira on Tuesday recorded slight gains of 0.02 per cent to close at 305.80 per dollar against 305.85 traded on Monday at the official foreign exchange market, while retaining the appreciated rate of N366 per Dollar at the parallel market.

This feat, however, not replicated at the Nigerian Autonomous Foreign Exchange (NAFEX) widow, as the daily turnover dropped to $238.98 million from $363.63 million recorded on Monday.

But the local currency, fought had to retained the rates to the dollar and Pound sterling at 366 and 492 respectively, while appreciated to 436 against the Euro, compared to 440 sold on Monday at the parallel market.

Although, the NAFEX window opened Tuesday trading activities at a better rate of 359.89 to the dollar, which was stronger than 359.97 settled on Monday, and as well closed stronger at 360.31 against 360.39 exchanged on the first trading day of the week.

Forex traders, had however expected that the Monetary Policy Meeting (MPC) of the Central Bank of Nigeria (CBN) at the last day of its meeting yesterday make certain decisions that would immediately impacted positively on the forex market but the committee at the end of its two days meeting held the interest rate or the Monetary Policy Rate (MPR) at 14 per cent for the eight consecutive time.

The MPC also, retained all other rates at previous levels, with Liquidity Ratio (LR) held at 30 percent and the Cash Reserve Ratio (CRR) at 25 per cent.

Before the meeting, different financial stakeholders in the country have continued to mount pressure on the MPC to reduce of the MPR from its current of 14 per cent.

The MPR, which serves as the benchmark interest rate in the country’s financial industry has been retained for seven consecutive MPC meetings at 14 per cent, but financial experts have expressed divergence opinions over the likely outcome of the MPC meetings which would holds today Monday and Tuesday in Abuja.

The Nigerian currency, had traded between 369 and 370 in the recent time but began it gaining streak when it closed below 370 a week ago, ending last week on a positive note at both the official and parallel markets.

The CBN, has however, reiterated its stance towards intervening at the Interbank Foreign Exchange market, while warning speculators against “nefarious activities’’, stating that checks were in place to guard against unlawful practices.

Okorafor, said the success recorded at the I& E FX Window was an indication of the appreciable level of confidence in the foreign exchange management by foreign investors and autonomous suppliers of foreign exchange to the market.