Naira falls at official market, CBN supplies $180m
The naira extended its declines at the official market on Monday , falling to 307 . 5 against the United States dollar .
The local currency closed at 307 to a dollar last week at the official market from the 305. 50 level it had traded since last year . It was quoted at 445 at the black market , firmer than the 450 a dollar it closed on Friday .
The Central Bank of Nigeria on Monday said it offered a total of $ 180m to meet bids for forwards , which includes requests for invisibles such as medicals , school fees and personal travel allowances valued at $ 80 m , through the interbank window .
The Acting Director, Corporate Communications Department, CBN , Isaac Okorafor , said the wholesale requests would be settled on Tuesday ( today ), adding that the closing interbank rate was N307. 5 /$ 1 .
Okorafor said with the fresh forex supply , naira should further strengthen in the foreign exchange market in the days to come .
He said the CBN had so far met all the legitimate demands from genuine customers , and would ensure sustainable forex liquidity and transparency in the process to enable as many customers as possible to get access to forex .
Okorafor advised eligible individuals with genuine foreign currency needs to freely approach their banks and authorised dealers with their request , stressing that the CBN had made adequate provisions of foreign currency for all such legitimate purposes .
The Chief Executive Officer , Cowry Asset Management Limited , Mr . Johnson Chukwu , said the depreciation of the naira at the official market might be part of the CBN ’ s effort to narrow the gap between the official and parallel market rates and achieve a market- reflective exchange rate.
“ The central bank could adopt an intentional strategy to allow the naira to depreciate at the official window of the market, even as the parallel market is appreciating , to reduce the spread between the two markets and achieve a more market- reflective exchange rate, ” he said .
A currency analyst at Ecobank Nigeria , Mr . Kunle Ezun , said a true price discovery may not happen as quickly as one would have expected.
“ The idea is that once they are able to fight the parallel market , they will want to allow the official market to depreciate and again reflect the market position . ”
He said the 305 at which the naira was trading before now was a managed rate.
Ezun said , “It is only when you have that interplay between demand and supply that you begin to see a rate that reflect the market. So, that may begin to happen but it may not be as fast as one would have expected.
“ But gradually, with confidence coming back to the market and the appreciation that we have started seeing in the parallel market, then we will begin to see a level of competitiveness in the official market. ”
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