Naira exchanges N409 to dollar at black market
Naira was quoted at an all-time low of N409 to the dollar on the black market yesterday, compared with N402 the preceding day, after the suspension of some banks from forex trading made dollars even harder to obtain.
The Central Bank of Nigeria, CBN, suspended nine commercial banks from forex transactions on Tuesday for failing to pay money owed to the government, although one was readmitted after making a payment.
Traders said the local currency fell due to the impact of the suspensions, compounding the dollar shortages Nigeria Naira exchanges N409 to dollar at black market Source: NSE Tenor Rate (%) O/N 18.7083 1M 16.5028 3M 17.794 6M 19.9892 Tenor Rate (%) Change (%) 1M 14.4143 0.012M 14.9106 -0.98 3M 15.2757 -2.03 NITTY NIBOR NIBOR as @ August 24, 2016NIBOR FAQs Exchange Rate Naira US Dollar N309.5 $1 Exchange Rates (N) WAUA 427.7768 USD 304.5 EURO 343.6283 CFA 0.5139 YEN 3.0268 SWISS FRANC 314.8589 POUNDS STERLING 401.5442 SDR 427.7007 Rate (%) Inflation 16.46MPR 14 Crude oil price $49.05 has been suffering due to the slump in the price of its oil exports.
“The suspension of some banks from transaction in the forex market has really increased pressure on the market,” said Aminu Gwadabe, president of the bureaux de change association.
Bank executives have been meeting central bank officials to resolve the forex issue as investors continued to dump their shares second day.
On the interbank market, the currency gained 0.2 percent to close at 305 naira to the greenback with traders attributing the rise to CBN dollar sale to prop up the unit. The bank has been selling dollars almost daily to boost liquidity.
However, currency forwards put the naira at 344.50to the dollar in one months’ time. On Thursday, the central bank settled $152.48 million of naira futures contracts it sold in June at an exchange rate of 279 naira per dollar, further draining its reserves, which is at its lowest in more than 11-years.
In June, the CBN abandoned its currency peg to the dollar, allowing the naira to weaken by 40 percent in a bid to attract more foreign investment. But so far trading in the official foreign exchange market has been limited as those with dollars prefer to sell them for a higher rate on the black market. The naira, which hit fresh record low since the CBN floated the currency on the official interbank market in June, first touched 400 on the black market this month. On the interbank market on Wednesday, no trades were posted until three minutes before the end of the session, when the central bank which has been reducing its dollar sales, intervened, traders said.
Only three deals worth $0.75 million were traded at N305.50 per dollar, a level the market has closed at since Monday.