Naira in gradual climb against dollar on Buhari, speculators, importers

Months long pressure on Nigeria’s curency, the naira, appeared to be easing for three consecutive days, on the  unofficial market, as it gained N98.00k or 24.5 percent to close at N302/$ at the Lagos Airport yesterday, compared to a high of N400/$ traded on Thursday last week.

The naira closed at N300/$ at the Lagos Airport, gaining N100.00k or 25 percent from N400/$ at the autonomous market last week.

The ease of preassure on the exchange rate at the autonomous market, analysts say, is coming on the back of President Muhammadu Buhari’s insistence at the weekend, that there was no going back on his position that the naira would not be officially devalued, which has signalled to speculators that there was no longer going to be a currency armada.

Importers who had been fingered for their willingness to buy the dollar at any rate in the last several weeks, appear now to no longer have the appetite to want to do so.

Buhari, on Saturday again rejected the idea of devaluing the currency of Africa’s biggest oil producer, despite a hammering of the naira at the foreign exchange market last week.

BusinessDay also learnt that the Association of Bureau De Change Operators of Nigeria (ABCON) is setting up a price band for its members, which will ensure that they do not buy the dollar for more than N200 and do not sell it for more than N205.

In the Festac area of Lagos, the naira gained N70.00k or 17.5 percent against the dollar, closing at N330/$ as against N400/$ last week at the parallel market. It closed at N328/$ yesterday from N400/$ last Thursday at the autonomous market, with a gain of N72.00k or 18 percent. It also closed at N310/$ in Kano State, BusinessDay found.

At the inter-bank foreign exchange market, the local currency also appreciated significantly in value against the dollar, gaining N1.83k or 0.92 percent to close at N197.45k/$ yesterday from N199.28k traded on Monday, data from FMDQ revealed.

The naira also appreciated against other currencies, as it closed at N480 yesterday from N488 against the pound sterling the previous day and N380 from N388 against the euro at the parallel market.

However, the CBN’s clearing rate at the inter-bank market yesterday remained unchanged at N197/$, data from FMDQ indicated.

Aminu Gwadabe, acting president of ABCON said the association is setting up a price band for its members where they should not buy the dollar at more than N200 and should not sell it at more than N205. “Every week, we will be guiding our members to ensure compliance”, Gwadabe told BusinesDay by phone.

Nigerian oil trading tycoon, Ifeanyin Uba, who had earlier yesterday offerred to play a role to get the naira back on track, also blamed speculators for the depreciation of the currency. In a late night message, Uba said the depreciation of the naira had indeed been artificial all along.

Uba said, “As at this evening, (yesterday) the dollar has dropped further to N310 as against N390 on Sunday evening before my interview on Channels.

“This shows that the earlier increase had been artificial, as some people were manipulating and benefitting from it. They will all be fished out in due course so that Nigeria will be better and the suffering of the masses will end.

“With God and our sincere efforts, even when we have not been fully consulted, the dollar can still be brought down to N200 and below,” he boasted.

Questions are now being asked about the sustainability of the naira’s appreciation.

But Gwadabe, assured BusinessDay last night, that the appreciation was sustainable with discipline, sensitisation of ABCON’s members on its anti-exchange rate hike policy and collaboration with the fiscal authority as regards reduction of cash usage.

“What we are experiencing presently in the economy is not a realistic exchange rate but a perceived rate. The reason is that the confidence that a lot of companies have in the naira is weak. They perceive it as a weak means of exchange”, Gwadabe said.

In a statement sent to BusinessDay, Gwadabe said ABCON plans to transform BDCS to compete within the global regulatory currency market to increase dollar liquidity.

He said the process to achieve the objectives include review and updating of operators manual, live trading platforms, automation of members transaction documentation’s requirements, real-time/online partnering with relevant stakeholders.

The Central Bank has resisted the depreciation by imposing some foreign exchange measures. It banned dollar sales to BDC operators last month, sending the naira to record lows on the parallel market, and later stopped daily sales to the interbank market, in an effort to conserve foreign reserves, now at their lowest in more than 11 years.

HOPE MOSES-ASHIKE