Parallel market rate falls to N378 as speculators lose more

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At last, the Naira was exchanged at the parallel market yesterday at N378 to a dollar in over seven months, punishing more speculators, barely one month after the currency hit a record low of N520/$.

Again, with the Naira gaining stability at all ends, there is a renewed optimism that the desire of the Central Bank of Nigeria (CBN) to achieve rates convergence between the Interbank and the BDCs markets appears to be in the horizon.
With yesterday’s record, the local unit gained about one per cent over Thursday’s transaction at N380/$ in a move that has seen the currency rebound gradually and steadily in the last three weeks.
At the current rate, the spread between parallel and the new official (retail) segment of the market, where intervention is done at N375/$, stands at N3.
The CBN had last month unveiled a new policy that deregulated the retail segment of the forex market, which allowed access to travel allowances, school fees and medical tourism.
Besides, it has intervened persistently in both the interbank and forwards contract market with over $1.5 billion since the new policy, which now crashed the parallel market rate.

CBN Governor, Godwin Emefiele, on Tuesday warned speculators that the bank had perfected plans to ensure that exchange rates fall beyond their expectations.
This week, the bank intervened with $180 million on Monday, $500 million on Tuesday and $100 million on Thursday, in both 60-day forward market and interbank.
But yesterday, it ended the weekly transactions with $100million offer at the interbank market to meet customers’ demands, out of which authorised dealers were only able to pick $81.347million after an initial bid for $91million.
At the interbank market, usually called the official market, the Naira exchanged for N307/$.
Acting Director of Corporate Communications at the CBN, Isaac Okorafor, attributed the inability of authorised dealers to pick up the entire CBN offer to increasing dollar supply and sense of apprehension among dealers, who anticipate a further crash in the rate of the dollar.
He reiterated the determination of the apex bank to sustain its current interventions in the market, adding: “Those who doubt the capacity of the bank to sustain the intervention in the market are beginning to have a change of mind.”
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