Naira falls to N355/$ as speculators mop up dollar

The naira yesterday depreciated in value after gaining against the dollar for four consecutive days at the foreign exchange (FX) market, BusinessDay learns.

This is attributed to the resurfacing of speculators who have taken advantage of the previous gain to mop up dollar liquidity across segment of the FX market.

Consequently, the naira yesterday lost N45 or 15 percent each against the dollar at the autonomous and parallel market. It closed at N345/$ compared with N300/$ the previous day at the autonomous market, while at the parallel market, it closed at N350/$ yesterday from N305/$ the previous day.

At the interbank market, naira on Thursday weakened slightly against the greenback losing N0.13k or 0.07 percent to close at N199.35/$ as against N199.22/$ the previous day, according to data from FMDQ.

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

Aminu Gwadabe, acting president, Association of Bureau De Change Operators of Nigeria (ABCON), said speculative activities and hoarding of dollar had returned to the market, pushing down the naira value again.

Analysts had said naira would stabilise at N300 against the dollar after sharply appreciating in value for the four days.

Ayodeji Ebo, head, investment research, Afrinvest Securities Limited, had said with time devaluation had to be considered based on depleting foreign reserve now at $27.8 billion, as of February 22, occasioned by low oil prices.

Currency dealers and analysts have fingered speculation, which has reduced to barest minimum in the last four days, as the reason for the local currency appreciation, charging the Federal Government through the CBN to take advantage of the appreciating naira to come up with policies that would sustain it.

BDC operators had asked the CBN to review the policy of dollar importation into the economy for the purpose of defending the naira.