In a new wave of continuous recovery following weeks of loss, the naira closed yesterday at N680/$ on the parallel market, registering a significant gain against the dollar.Information Guide Nigeria
The recovery of the local currency is attributable to a reduction in dollar demand and the release of large amounts of dollars by forex speculators seeking to profit from the previous market rate surge.
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Live, Study and Work in Canada. No Payment is Required! Hurry Now click here to Apply >> Immigrate to CanadaThe naira made a significant comeback when the Central Bank of Nigeria (CBN) pumped an undefined quantity of dollars into the market to increase liquidity. Earlier in the week, the naira was trading at close to N900 per dollar.
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The naira is anticipated to extend its current climb after buyers refused additional bargaining with speculators seeking a N1,000/$ benchmark, according to a market observer and rate quotes from currency dealers.
The Investors and Exporters Forex (I&E) Window, which is currently the official market rate, quotes the naira at N441.46 per dollar, according to statistics on the CBN website. At this window utilized for official transactions, the local currency has remained constant, but the majority of retail transactions occur on the parallel market.
Hassan Abdul, a bureau de change operator based in Ikeja, Lagos, reported that market volatility has reduced and stability is gradually returning, with speculators trading with greater caution to minimize losses.
Hassan Abdul, a bureau de change operator based in Ikeja, Lagos, reported that market volatility has reduced and stability is gradually returning, with speculators trading with greater caution to minimize losses.
He stated that the Economic and Financial Crimes Commission’s (EFCC) crackdown on unlicensed BDC operators also contributed to market stability.
“Dollar to Naira exchange rate in Nigeria black market is N680/$, according to 16 sell rates shared by the traders. The coming weeks will be difficult as more businesses resume demand for dollars to import goods for end-of-year sales,” he said.
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Live, Study and Work in Canada. No Payment is Required! Hurry Now click here to Apply >> Immigrate to CanadaAnalysts believe that currency speculators will lose at least N10 billion if they continue betting against the naira in the coming months.
Ikenga Kalu, a Forex Dealer with AZA Finance, stated that the naira’s rebound was precipitated by the rush to exchange soon-to-be-defunct high-value naira notes into dollars.
He said: “While Nigerian Bureaux de Change operators have confirmed reduced demand at current parallel market levels, we expect dollar appetite to pick up again in the coming days and the Naira to resume its recent slide.”
Robertson, who is also RenCap’s Head Macro-strategy Unit, added: “Things are not looking pretty good for Nigeria and other emerging markets. Oil production in Nigeria has fallen so badly in the last few years and oil price is also about falling more. We are going to see disinflationary policies coming because we are approaching recession,” he said.
The Managing Director of Financial Derivatives Company Insufficient, Bismarck Rewane, stated that the naira is sliding because of increased foreign exchange demand and limited foreign exchange supply.
He said: “Nigerian consumers, businesses, and individuals alike are facing challenges and headwinds and are reeling in an atmosphere of hopelessness. This is because of a myriad of factors.
“Notably, the precipitous fall of the naira in the forex market, the power supply shortage and now the almost unaffordable price of diesel.
“In spite of the hike in interest rates, we are witnessing what some analysts fear may become a bout of runaway inflation. Inflation is not just domestic but global.”
Johnson Chukwu, the managing director of Cowry Asset Management Limited, stated that in order to save the naira, Nigeria must construct an economy that is a net exporter of quality goods and services in order to generate more dollars.
Additionally, the EFCC has warned Bureaux de Change (BDCs) against abusing regulatory restrictions when selling dollars at the retail level of the market.
The warning followed the announcement by the regulator that the Central Bank of Nigeria (CBN) would redesign the N200, N500, and N1,000 banknotes.
In a statement, the National Executive Council of the Association of Bureaux De Change (ABCON) said that the EFCC had instructed all licensed BDCs to exercise extra caution when seeking client information during transactions.
The agency cautioned BDCs not to get connected with cash couriers, since this is a significant infringement that can lead to prosecution of offenders.
“The BDCs are also advised to render regulatory returns. They are the gatekeepers to the economy and their directors will be keenly monitored by the CBN and security agencies,” it said.JAMB Result
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