The cost of dollar may crash further to N400 today after it dropped to N420 on Tuesday at the black market, following the intervention policy of the Central Bank of Nigeria (CBN) in the forex market, traders say.
The nation’s currency on Tuesday gained N22 or 4.98 percent from N442 per dollar traded at the parallel market.
Investigation shows that dollar was quoted at N420 at the Lagos International Airport, while it hovered between N420 and N425 at Festac area of Lagos State.
At the interbank spot market, it remained the same, trading at N307.50k per dollar, according to data from the FMDQ.
The apex bank was said to have strengthened the naira by 0.6 percent in the last two weeks through dollar interventions on the official market aimed at narrowing the spread with the black market.
The central bank had been selling dollars at 305 levels since August to support the Nigerian currency. However, it devalued the naira last month for individuals, paving the way for a possible broader move to narrow black market rates.
Godwin Emefiele, governor of CBN, noted at the Monetary Policy Committee (MPC) meeting yesterday that the average naira exchange rate remained stable at the interbank segment of the foreign exchange market in February.
Total foreign exchange inflows through the CBN decreased by 8.87 percent in February 2017, compared with the previous month, as foreign exchange market receipts were significantly lower. Total outflows, also declined by 7.32 percent during the same period.
The Emefiele said he was not convinced about a currency float due to its effect on inflation, which fell for the first time in 15 months in February.
He said after the MPC meeting that inflationary pressures were continuing unabated while Africa’s biggest economy was undergoing its first recession in 25 years, justifying the rate decision.
Emefiele also told reporters the central bank was optimistic that interventions in the foreign exchange market would stabilise the battered naira currency.
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