Nigeria's currency market crashes to N375/$1, as CBN injects fresh $195m

shakirudeen taiwo

July 4, 2017 10:10 AM

The future outlook of the Naira remains strong and positive with the continue intervention of the CBN.

Before the start of the CBN's inventions in February, 2017, Naira has been on a free-fall against the dollar and other major currencies in the Forex market.

Nigeria’s currency on Monday, July 3, 2017, appreciated significantly in the FOREX market, as the Central Bank of Nigeria (CBN) continues its drive to ensure liquidity and stability in the foreign exchange market.

The Naira was traded at N367/$1 and N465/£1 at the opening of the parallel market on Monday but closed the day at N365/$1 and N410/£1. This appreciation was adduced to the $195 million injections into various segments of the inter-bank foreign exchange market.

Speaking on the development, Mr Aminu Gwadade, President of Association of Bureau De Change Operators of Nigeria (ABCON) noted that outlook of the Naira remained strong and positive.

“The speculation that the Naira would depreciate in weeks ahead should be disregarded,” he stated. While affirming that the apex bank’s commitment to the boosting the forex liquidity market will surely address the demand for foreign exchange.

Meanwhile, at the Bureau De Change segment Naira exchanged at N363/$1 while Euro and Pounds Sterling traded at N412 and N465 respectively.

At the Interbank (official) market, the currency closed the day at N305.96/$1 with Pounds Sterling and Euro selling for N397.12 and N349.22 respectively.

Investors’ and Exporters’ Forex (IEFX) window on the FMDQ trading platform closed at N359/$1.

Also commenting on the foreign exchange situation in the country and its impact on the investment climate, Mr Mark Bohlund, Senior Economist - Africa and the Middle East, Bloomberg Intelligence stated that “the new NAFEX window has improved liquidity in FX trading. I can’t say if it is foreign or local funds running the latest rally but larger inflows are unlikely given doubts about for how long the window will remain open, especially if there are further pressures on the balance of payments from lower oil prices.”

Mr Mark further stated that:“Well, arguably the foundation of the FX policy, i.e. maintaining the naira peg, has been decided at the presidency, not the CBN, so difficult to judge Emefiele on that.”

“The NAFEX window has drawn in some funds but does not mean it has materially addressed the situation.”

shakirudeen taiwo

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