Finance

Naira rebounds, trades 850/dollar at parallel market

Naira exchange rates February 2024

The naira rebounded against the United States dollar at the parallel market on Wednesday, closing at 850/dollar.

This came about two days after the Central Bank of Nigeria announced its planned intervention in the foreign exchange market.

The naira was sold for around 950/dollar at the parallel market on Monday. It gained further and closed at 915/dollars on Tuesday.

A Bureau de Change operator, Alh Taofeek Ahmed, who spoke to Our correspondence on Wednesday said, “We bought and sold the naira at 830/$ and 850/$ today. The demand was lower compared to last week”

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Another BDC operator at the Lagos airport, Alhaji Mustapha Umar, said the greenback was sold and bought for 850/dollar and 835/dollar.

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A BDC operator, Aminu Zakari, who operates around the Abuja CBD, said he bought and sold the dollar for 860/dollar and 845/dollar.

According to him, there has been uncertainty in the parallel segment of the market following the announcement by the CBN

He said operators were awaiting the proposed intervention by the central bank.

At the Investor & Exporter forex window, trading commenced at N781.66/$ and reached a high of N 799.90/$  before closing at N 759.86/$ on Wednesday; it closed at N781.30/$ on Tuesday.

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On Monday, after briefing President Bola Tinubu on what the bank was doing to halt the naira slide at the State House in Abuja, the Acting Governor, CBN, Folashodun Shonubi, said it was set to take new measures to stabilise the naira against the dollar.

He assured Nigerians that the CBN was working to improve liquidity and achieve stability in the market, including addressing issues in the parallel market.

He said the fluctuations in the parallel market were not solely driven by economic factors, but also speculative demand.

A top official of an investment bank said following the CBN’s announcement on Monday, speculators became cautious in the market.

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“Many Nigerians abroad are investing in Eurobonds. But now, people that have dollar income will prefer to save it in the dollar rather than change it to naira. We have many Nigerian companies launching dollar-denominated bonds to enable more people to invest in dollars,” an analyst at a securities firm who chose to remain anonymous said.

The Nigerian National Petroleum Limited obtained a $3bn emergency loan on Wednesday to help stabilise the naira.

Analysts are divided if the amount is sufficient to stabilise the local currency

Punch

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