The naira on Monday gained against the US dollar by N0.76k or 0.38 percent, as demand slows at the inter-bank foreign exchange (FX) market.
After trading on Monday, the local currency closed as N197.82k against the dollar compared with N198.58 traded on Friday last week, data from Financial Markets Dealers Quotations have revealed.
At the Bureau De Change segment of the FX market on Monday, naira also gained by N1.00k or 0.43 percent against the dollar closing at N230/$ as against N232/$ on Friday last week.
Naira remained stable at the parallel market closing at N232/$.
Analysts see the appreciation of the naira across market segments as a response to the policy measures of the Central Bank of Nigeria (CBN).
The naira has been under the ropes on the black market after the central bank two weeks ago curbed access to the dollar on the official inter-bank market for importers buying a wide range of goods, shifting demand for hard currency to the black market.
Razia Khan, managing director, chief economist, Africa Global Research, Standard Chartered Bank, London, said “Nigeria is under pressure to re-open two-way inter-bank FX trading.
Given the current perceived market shortage of FX, a re-opening of the market is likely to see USD-NGN trade higher.
The ‘negative watch’ period for the continued inclusion of Nigerian bonds in the widely tracked GBI-EM index was extended in June, to allow the new government the time to formulate policy.
“Nigeria’s changing economic fundamentals call for a rethink of FX policy, in order to better absorb external shocks. We see Nigeria’s current account surplus moving to a deficit, both in 2015 and in the years ahead. The pace of accumulation of new FX re- serves will not easily support a fixed exchange rate system.”
HOPE MOSES-ASHIKE
