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Thursday, May 19, 2022

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Again, Nigeria’s naira strengthens against greenback to N508 on parallel market

By Oludare Mayowa

Again, the naira appreciated against the dollar on the parallel market on Tuesday, closing at N508 to the greenback from N512 a dollar it closed on Monday.

The nation’s currency has rolled back some of its losses after the last Tuesday’s Central Bank of Nigeria (CBN’s) decision to suspend dollar sales to the Bureau de Change operators (BDCs), which led to a sharp drop in the value of the naira.

The naira had traded at N504 per naira prior to the announcement by the CBN Governor, Godwin Emefiele to stop dollar sales to BDCs after the last week’s Monetary Policy Committee (MPC) meeting in Abuja.

The Nigerian naira weakened to N525 to the dollar on Wednesday before it reversed some of the losses on Thursday and has since then rolled back some of the losses.

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Traders said the massive campaign by some banks to make dollar available to retail customers has provided the needed support for the naira in the near term.

Some banks have embarked on campaign to attract retail customers as they offer some incentive to dollar endusers who patronise them.

Traders said some Nigerians who have built their own foreign exchange reserves as part of measure to hedge against the flunctuating value of the naira and preserve their investment took advantage of the depreciation of the naira to sell down their position.

The traders said the naira may be back at below N500 to the dollar level before the week runs out as the CBN releases dollar to commercial lenders for onward sale to retail customers.

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