… as naira weakens to N465 against dollar
Central Bank of Nigeria (CBN) has been urged by some analysts to continue its intervention efforts to further rid off speculation in the foreign exchange market.
This is against the backdrop of gradual weakening of the nation’s currency in the black market. The naira on Wednesday depreciated to N465 per dollar, losing N5 from the N460/$ traded the previous day at the parallel market.
BusinessDay market checks show that dollar was sold at the rate of N362 at Apapa, while it closed at N465 per dollar at Festac area of Lagos State.
Scarcity of dollar is being noticed at some Bureau De Change segment of the forex market, while those who still have sold at N460 per dollar.
Kunle Ezun of treasury research, Ecobank Nigeria, attributed the naira depreciation to forces of demand and supply, adding that speculation was also contributing to this.
“The CBN should supply more to shore up the naira value,” Ezun told BusinessDay in a phone interview.
At the interbank foreign exchange, the foreign currency closed at N305.70k, which shows a slight gain of N0.05k compared with N305.75/$ the previous day, according to data from FMDQ.
The foreign reserves rose to $29.96 billion as of March 7, according to data from the CBN, and this has continued to support the naira performance. The CBN sold another $100 million via SMIS–Wholesale to the banks for onwards transaction not exceeding 60-day, thereby bringing its intervention in the market to $1.12 billion in two weeks.
Market analysts observe that the CBN intervention effort will further create problems for currency speculators who are yet to recover from the sudden appreciation of the naira.
According to former economic adviser to the President and Minister, National Planning Commission, Ode Ojowu, “It appears this time around, the CBN has decided to become smarter than the market manipulators, by putting on its cap of authority to look beneath the market forces.”
The CBN in February 20, changed its forex rule supply to guarantee supply to both small and the big end-users. The policy has restored stability and bolstered market confidence, which has ultimately boosted the value of the naira.
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