Now N380-N385/$1 as CBN pumps another $100m into market
Currency speculators and others who had stockpiled the greenback continued to count their losses on Thursday, when the naira extended its gains on the parallel market and inched closer towards a convergence between the street price for the dollar and the rate offered by the Central Bank of Nigeria (CBN) for invisible transactions.
The naira sold for between N380 and N385 in Lagos on Thursday, stronger than N399 from the previous day.
The FX rate for invisibles has remained at N375 since the CBN announced new policy measures for the FX market a month ago.
The central bank also sustained its intervention by auctioning an additional $100 million through wholesale FX forwards to banks for onward sale to their customers in all sections of the economy.
Of the $100 million offered by the CBN, $91 million was taken up by currency dealers.
Confirming this, CBN spokesman Isaac Okorafor said dealers would get value for their respective bids on Friday.
He disclosed that the highest and marginal bid rates were N330/$1 and N320/$1, respectively, adding that no intervention was made by the central bank to meet requests for invisibles on Thursday.
On the parallel market, the nation’s currency has appreciated by 27 per cent, or about N140, from N525 to a dollar a month ago.
The central bank has been intervening aggressively on the official market in recent weeks, leading to a narrowing of the gap between the official and parallel market rates.
CBN Governor, Mr. Godwin Emefiele, on Tuesday expressed optimism about the convergence of the rates on the official and parallel markets, stating that the gains made by the naira against the greenback in recent weeks was not a fluke.
Emefiele said he was happy that the central bank’s intervention was yielding positive results.
But THISDAY gathered on Thursday that while the central bank has succeeded in substantially clearing backlog of dollar demands for retail invisibles, it was falling short of meeting the FX demand for capital repatriation and other wholesale invisibles.
A chief executive of one of the leading banks in the country, who confirmed this in a chat, however pointed out that this could be a strategy by the CBN.
“While the CBN has done a lot in the past one month, we must not forget that there is a backlog of investors who are trying to repatriate capital that has not been settled.
“The CBN was focusing on trade transactions previously and recently on school fees, PTA/BTA. But foreigners who had invested in bonds, equities and need to repatriate dividend payments are still behind on the queue.
“I want to assume that once the central bank sorts out the retail invisibles, it would start to attend to FX demand for capital repatriation,” the bank CEO who did not want his name in print said.
The country’s external reserves, meanwhile, closed at N30.347 billion on Thursday.
Credit Thisday
