- as CBN offers $81.2m SME segments, others
Nigeria’s local currency traded at N400 to the US dollar on Monday on the FX window introduced barely two weeks ago for investors.
National Daily gathered that investors were demanding rates above N400/dollar while locals were quoting rates as low as N350/dollar.
According to sources, traders held a conference call last Friday with market regulator FMDQ OTC Securities Exchange to discuss the wide range of quotes on the naira for investors, although the meeting did not produce any resolutions.
FMDQ provides daily opening and closing quotes on the naira.
Traders, worried about illiquidity in the currency market despite making the exchange rate market-determined for investors, said no resolution was reached at the meeting.
The CBN had in April said it would allow investors to trade the naira at market-determined rates, a move intended to improve the dollar supply and attract foreign investors who bolted from Nigeria at the start of the latest naira crisis.
The move introduced yet another exchange rate to the five existing ones. Still, analysts doubted it would be enough to draw more hard currency into the economy.
Investors have questioned the over-the-phone trading system for lack of price discovery and transparency.
The investors FX window was designed to allow investors, trade in the currency at market-determined rates.
Meanwhile, the CBN on Monday intervened with another $81.2 million in the invisibles and small and medium scale enterprises (SMEs) segments of the market.
A breakdown of the interventions indicated that the bank provided the sum of $44 million to meet customers’ requests for invisibles such as Basic Travel Allowances (BTA), Personal Travel Allowances (PTA), medical bills and tuition fees, among others. In addition, the SMEs segment also received a boost of $37.2 million.
The CBN had last Friday, sold a total sum of $389 million to authorised dealers in the retail sector of the market as spot and forwards. Of the sum, $87.885 was for spot sales, while $300.8 million was sold as forwards in three tenors of 30, 45 and 60 days, respectively.
The central bank said in April it would allow investors to trade the naira at market-determined rates, a move intended to improve the dollar supply and attract foreign investors who bolted from Nigeria at the start of the latest currency crisis.