There has been some level of stability in the foreign exchange market as the nation’s currency, the naira, traded between N199 and N200 after the closure of the Retail Dutch Auction System (RDAS) window by the Central Bank of Nigeria (CBN). To bring sanity into the foreign exchange market as well as save the depleting foreign reserves, the CBN closed the official forex window and channelled all FX demand to the inter-bank foreign exchange market. Consequently, the naira has been trading around N199 and N200 showing some level of stability, analysts admit.
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Ayodejo Ebo, head of investment research at Afrinvest, told BusinessDay by phone last night that in terms of pricing, there is some level of stability as the naira traded between N199 and N200. He said in the interim, the policy of the CBN is having a positive impact on the foreign exchange. Ebo admitted that the apex bank’s devaluation of the naira reflects the fair value of the local currency. Although interbank FX market liquidity remained low relative to demand, naira volatility in the trading session following the policy review was moderated as the CBN intervened in the inter-bank market with dollar auctions. The local unit closed at N199.23/US$1.00 on Friday last week relative to the previous week’s close of N201.43/US$1.00, a 1.1% W-o-W appreciation, Afrinvest said in a report.
