The
naira fell to 351 to the United States dollar at the parallel market and
slightly to 282 at the new interbank market on Monday.
Following
the floating of the naira and the adoption of a single structure through the
interbank/autonomous window, the currency closed last week at 281 to the
greenback at the official market.
The
President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu
Gwadabe, in an interview with our correspondent, said the naira dropped to 351
at the parallel market from between 346 and 348 due to persistent liquidity
issue.
He
said, “Lack of liquidity in both the interbank and parallel markets is what is
affecting the naira exchange rate to the dollar.
“Right
now, the only thing that the market is scavenging for is the export proceeds.
There is a liquidity crisis.”
Asked
if demands have shifted away from the parallel market as a result of the new
forex policy, Gwadabe said, “How can demand shift away from the parallel market
when you have about 41 items that cannot obtain forex from the official market?
You cannot completely kill the black market, you can only formalise it.”
The
Central Bank of Nigeria, which has been intervening in the interbank market
since it abandoned its peg of N197-199 to the dollar, asked for bid-offer
quotes from currency traders on Monday as it sold dollars at the interbank
market to boost liquidity, Reuters
quoted traders to have said.
After
abandoning the naira’s 16-month old exchange rate peg a week ago, the central
bank sold dollars at an auction to clear a backlog of demand and keep markets
active.
It
sold an undisclosed amount of dollars on Monday. However, the interbank market
traded a total volume of $32m just before the market closed, which traders
attributed to the central bank’s intervention.
The
interbank market opened at 8am with no activity for more than three hours.
“Liquidity
is still relatively thin,” one trader said, adding that clients were waiting to
see where the naira settled eventually before they would begin to participate
in the market.
Currency
traders on Monday said they had tightened the differential between bids and
offers to N0.5 from one naira set when the currency was floated last week to
try to boost trading and attract liquidity.
Prior
to the old exchange rate peg, the currency market traded on N0.5 spreads, they
said.
Nigeria’s
interbank market has traded for six days after the central bank forex reforms.
Traders are expecting substantial currency flows from oil companies and
exporters to start to trickle in from this week, they said.
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