The naira lost the momentum it had gained last week and plunged against the dollar on Monday, averaging 1,030/$ on the parallel market.
The Punch reported that comparing this to the N950 it concluded the week last Friday, the local currency has lost N80 or 8.42 percent.
Additionally, since the Central Bank of Nigeria started to clear some of its FX backlog last week, this is the first time that the value of the naira has declined.
As a result of customers who purchased the dollar at a higher price fighting its decline after the Central Bank of Nigeria’s move last week, the dollar has appreciated vs the naira, according to the President of the Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe.
According to an earlier report, the apex bank has started paying outstanding matured FX forwards owed to several banks,.
This was done in an effort to increase foreign exchange market liquidity after weeks in which the naira dropped to all-time lows. The quantity of past-due forward payments, as stated by Finance Minister, Wale Edun, was around $6.7 billion.
The naira gained almost N220 as a result of this action, as it had closed the week at N950/dollar on the parallel market. It appears that the naira has suddenly lost its momentum.
According to Gwadabe, “Speculators are always looking at elements of sustainability, they start to respond as soon as they realize the injection is not continuous. We are seeing the market’s response to it. There is opposition as well. There are people that bought at a higher price that this does not favour. People are not willing to take further losses.”
He claimed that “The market must continue to receive confidence from us if we are to maintain the current pace. Announce to the market the opening of a new window and increase liquidity. The retail end is located in the parallel market.
“Furthermore, there is currently no information available regarding how liquidity will enter that sector. The only thing we know is that the formal foreign exchange market will progress with the inclusion of BDCs. We cannot afford to wait on the currency market.”
Additionally, according to information on FMDQ OTC Securities Exchange, the naira fell by 3.6% in the official market, closing at N809.02 to the dollar on Monday after closing at N780.23/$ on Friday.
