Naira sustains gain as dollar crashes at parallel market

The Naira on Friday sustained its gains against the dollar as liquidity boost by the Central Bank of Nigeria (CBN) had forced a crash in the price of the greenback.

In Lagos South west Nigeria  the Naira exchanged at N460 to a dollar at the parallel market, gaining 40 points from N500 it recorded on Thursday while  the Pound Sterling and the Euro traded at N575 and N480 respectively.

At the Bureau De Change (BDC) window, the Naira closed at N399 to a dollar CBN controlled price, while the Pound Sterling and the Euro exchanged at N610 and N520 respectively.

Meanwhile in Abuja, Nigeria’s capital city, the dollar went as low as 400, as traders and other Nigerians began to keep naira, in place of the US dollar.

Ibrahim Baba, a forex trader in Abuja, said the dollar however stabilised at about N450 by the close of business on Friday.

“Market has been dropping; in the morning it was very bad, but this evening, it has gotten better, it is now at 450. It was at 400, 410, 420, different rates in the morning,” he said

“Some people said they are not buying at such low rates, they are hiding their naira. We think the dollar would drop further.”

 Speaking on how much drop they anticipate in the coming week, Baba said “we are expecting the dollar to stabilise at 380, 395, or a maximum of 400, and it can be as soon as Monday”.

Trading at the interbank window saw the Naira closed at N305.50 to a dollar.

Traders at the market expected the Naira to sell for less than N400 to a dollar if the boost in liquidity by the CBN was sustained.

In a related development , Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON) said that currency speculators were expected to lose billions of Naira to the new forex policy.

Gwadabe said that speculators were already overwhelmed by the policy as they were taken by surprise by the move of the apex bank.

Investigations show that the new CBN policy directing banks to sell forex for school fees, medicals and other allowances was already impacting positively at the market.