Naira closes at 363/dollar after new year break

The naira closed at 363 per United States dollar at the parallel market on Tuesday, the same rate it closed before the New Year break on Friday. The local currency, which has been hovering around 365/dollar for some months, rose to 364/dollar as the Christmas holiday approached. The naira later rose to 364/dollar last week before closing at 363/dollar on Friday. Foreign exchange traders and currency analyst had predicted that the naira would be stable during the Christmas and New Year holidays.

They said the Central Bank of Nigerias regular interventions through the injection of dollars into the market would deter currency speculators from making a bet on the local currency. The naira has been hovering at 360/dollar at the Investors and Exporters FX Window, while it has been quoted at 306.05 at the official market, the level at which the central bank has been intervening.

The CBN has been injecting dollars into the forex market on weekly basis in the past few months. Meanwhile, the President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, has warned that spending by politicians ahead of the 2019 general elections may threaten the stability of the naira. Gwadabe said the propensity to hoard dollars now, to be spent during political campaigns, was not new to the nations political history.

The ABCON chief, therefore, called on the regulatory authorities and security operatives to ensure that currency hoarders and speculators do not leverage the 2019 elections to erode the gains recorded in the nations foreign exchange market. Gwadabe noted that the CBN had spent about $8bn in a series of interventions at the forex market, leading to the flattening of rates across board.

According to him, the BDC operators, as critical stakeholders in the forex market, are committed to playing by the rules in ensuring that the naira remained stable. Since February, when the naira exchanged at N520 to the dollar, the CBN had intervened aggressively to ensure it remained stable at about N363 to the dollar. Efforts by the CBN and critical stakeholders like the BDCs led to the convergence of rates between the parallel market and the BDC segment.

Meanwhile, most of Africas main currencies will remain at a steady level as foreign markets remain sluggish over the holidays.

(Punch)