Naira loses stem, drops against Dollar at parallel market

By Odunewu Segun

The naira depreciated against the United States dollar at the parallel market on Tuesday to 370, down from 368/dollar on Monday. The local unit had closed at 367/dollar on Friday.

According to findings by National Daily, lack of dollar sale by the Central Bank of Nigeria on Monday could have been responsible for the performance.

The CBN has been supplying dollar to the forex market through intervention on Mondays in the last few weeks. The exchange rate had hovered between 363/dollar and 365/dollar in recent weeks.

Recall that the Central Bank of Nigeria (CBN) did intervened in the Inter-Bank market to the tune of 364 million dollars to sustain liquidity in the Foreign Exchange (Forex) Market.

According to the Acting Director of Corporate Communications for the apex bank, Mr Isaac Okorafor, the Retail Secondary Market Intervention Sales (SMIS) received the largest allocation of about 264.1million dollars.

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He said the CBN also offered 100 million dollars to authorised dealers in the wholesale window.  “The bank remains committed to achieving a convergence of rates at the inter-bank and Bureau-de-Change segments of the market,” he said.

The apex bank had recently intervened in the wholesale, Small and Medium Enterprises (SMEs) and invisible windows to the tune of 195 million dollars.

Economic experts said unless the CBN maintained its weekly supply of forex into the market, it might find it difficult to keep the naira below 370/dollar.

Stakeholders expect the regulator to announce the sale of dollar before the week runs out.

Meanwhile, the Debt Management Office is planning to raise N135bn ($442.62m) in bonds on August 23.

The DMO said on Tuesday it would sell N35bn of bonds due in 2021 and N50bn each of bonds due in 2027 and in 2037, using a Dutch auction system.

Settlement is expected two days after the sale. The bonds are re-openings of previous issues.

The Federal Government issues sovereign bonds each month to help fund its budget deficit, support the local debt market and maintain a benchmark for companies to follow.