Currencies Traders in Parallel Market Sell Dollar NGN515
Naira steadied at the investors and exporters window on Wednesday but depreciated at the parallel market as currencies trades raised the foreign exchange spot rate to N515 a dollar.
As of yesterday, the local currency traded at N510, consolidating the previous week gain as Nigerian banks come into dollar sales space after the Central Bank of Nigeria (CBN) ends supply to BDCs. At the investors and exporters window, it costs N411.50 to obtain a unit of United States dollar, the price that has been held since last week.
The Nigerian external reserve has been in an uptrend lately, though sluggish but downward trend that permeated the first half has been ebbed. Africa largest economy is expected an inflow into the foreign currencies accounts in the second half of 2021 from Eurobond issuance of $6.18 trillion approved by the lawmakers to bridge the budget deficit.
In addition, Nigeria is also expected to key into the International Monetary Fund’s recently approved $650 billion for members’ countries, of which an inflow of up to $3.5 billion could be used by policy authority.
From the $33.10 billion, the gross external reserve has bucked the trend as now seen around $3.59 billion keep hope alive for the local currency that has been battered official and unofficially due to dollar shortage in the economy.
Six years ago, Naira official rate was N197 and since then the apex bank through subtle and wild announcements have pegged the official rate at N410.
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The move, though close spreads between various markets but the monetary policy authority are yet to successfully close high spreads in the black market on account of dollar shortage.
“Nigeria problem is poor dollar income. Once the country can generate enough dollars like in the 80s, naira would breathe fresh air”, MarketForces Africa gather from analysts.
Nigeria’s FX reserves closed higher for the third consecutive week as the gross reserves position increased by US$137.23 million week on week to US$33.54 billion.
Meanwhile, the naira stayed flat at NGN411.50 a dollar at the investors and exporters but appreciated by 1.4% to N510.00 in the parallel market.
The total volume of dollars traded at the investors and exporters window last week turnover decreased by 37.8% to US$489.19 million, with trades consummated within the NGN400.00 – 427.95 band.
“We expect improved liquidity in the investors’ window over the medium term, given our expectation of increased oil inflows in line with the rise in crude oil prices, and inflows from foreign currencies borrowings (USD6.20 billion) and IMF SDR (USD3.40 billion)”, Cordros analysts said in a report.
Currencies Traders in Parallel Market Sell Dollar NGN515
