Naira appreciates after major slump at parallel market

The Naira, on Monday, appreciated against the dollar at the parallel section of the foreign exchange market.

Bureaux De Change (BDC) operators, popularly known as ‘abokis’, who spoke on Monday quoted the naira at N695 to a dollar. The figure represents a gain of N12 or 1.7 percent compared to the N707 it traded last week.

The traders put the buying price of the dollar at N680 and the selling price at N695, leaving a profit margin of N15.

The naira in recent times has continued to fall against the Dollar in the black market, hitting an all-time low of N720/$1 at the parallel market last week.

READ ALSO: Naira depreciation: BDC operators tell CBN what to do

On Friday at the P2P market, it depreciated against the United States Dollar by N16 to sell for N736/$1 compared with the previous day’s exchange rate of N720/$1.

Also, the Nigerian currency lost N2.80 or 0.66 per cent against the greenback in the Investors and Exporters (I&E) window of the FX market as it closed at N429/$1 in contrast to Thursday’s value of N426.20/$1.

In the parallel market, the local currency had a breather as it appreciated against the US Dollar for the first time in some days by N5 to trade at N705/$1 compared with the previous day’s N710/$1.

In the interbank segment, the Naira lost N2.48 against the Pound Sterling to sell for N504.21/£1 versus the preceding day’s N501.73/£1 and against the Euro, it gained 86 Kobo to settle at N421.32/€1 in contrast to the N422.19/€1 it closed on Thursday.

They attributed the appreciation in the value of the naira to the adequate availability of dollars in the market to meet demand.

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READ ALSO: Naira depreciation: BDC operators tell CBN what to do

“The rates have been dropping. Some people have bought dollars from different states like Kano where it is cheap. They brought it to Lagos. Now, we have more dollars in the market compared to last week,” Musa, a BDC operator said.

The Central Bank of Nigeria (CBN) stopped forex sales to BDC operators in July last year, accusing them of being involved in illegal financial flows and money laundering in Nigeria.

Recently, the Economic and Financial Crimes Commission (EFCC) raided a BDC hub in Abuja over allegations that some operators are mopping up foreign currencies.

According to reports, the invasion was a covert operation to “dislodge currency speculators who are alleged to be massively mopping up available foreign currencies”.

Meanwhile, the local currency fell by 0.66 percent at the official market to close at N429 on Friday, according to details on FMDQ OTC Securities Exchange — a platform that oversees official foreign-exchange trading in Nigeria.