Naira sells for N395/$ at parallel market

There was slight improvement in the value
of the Naira Friday at the parallel market as
it was sold for N395 to the US Dollar just  as
two banks kick started the sale of foreign
exchange to the Bureax de Change
operators.
This translated to N5 gain to the local
currency which had slumped to N400/$ at
the black market on Thursday.
However, at the inter-bank market, the Naira
depreciated further to N318.91 , down from
the N315.06 to the dollar from the previous
day.
Commenting on the latest development, the
President of the Association of Bureau de
Change (ABDC)Operators Alhaji Aminu
Gwadabe, who had earlier expressed
optimism that the Naira would rebound,
said:
“The exchange rate today(Friday) was N394,
N395/$.As of today only two banks
indicated interest to sell the proceeds of
international money transfer which they
were asked to sell to us. They said they
would sell to us at the inter-bank rate plus
one per cent. More banks said they would
come by Monday(today).”
On the volume sold to them,  he said it was
$15,000 per bid maximum, adding that “the
bigger banks were unable to give because of
logistics. That would be on Monday also for
collection.”
The Naira has dropped steadily on the black
market last week after opening the week at
381. Traders blamed the situation on high
dollar demand from holiday makers
travelling overseas for vacation.
Recall that CBN told international money
transfer operators to pay dollar proceeds
from customer transfers into local
commercial banks in naira, while selling the
dollars themselves to bureaux de change
outlets.
The bank hopes the move will help narrow
the yawning gap between the official and
black market rates and boost dollar liquidity,
traders say.

It had hoped that the need for a black
market would be erased by scrapping the
dollar peg and thereby attracting foreign
investment.
But dollar drought persists and has curbed
interbank activity, despite the central bank
hiking interest rates last week and mopping
up naira liquidity to shore up debt yields.
Some past suppliers of dollars, including oil
firms, are now selling some of their hard
currency directly to petrol importers under
an arrangement with the government,
traders say.