Business

Naira remains stagnant as Pound declines against rivals

Published

8 years ago

June 27, 2018

The Nigerian Naira has remained stagnant against the US dollar at the parallel segment of the foreign exchange market, maintaining the N362 rate for days against the greenback at the black market.

Against the British Pound Sterling, the naira closed at the rate of N483 and closed at the rate of N420 against the European Single Currency, Euro as it was on June 25, but appreciated against Pound.

The naira has maintained momentum across the foreign exchange market due to the intervention of the CBN.

Last week, at the Bureau De Change (BDC) window, the naira closed at N360 to the dollar, while the Pound Sterling and the Euro exchanged at N483 and N424, respectively.

Trading at the investors’ window saw the naira close at N361 to the dollar, with a trading turnover of N312.05 million. The naira closed at N305.8 to the dollar at the CBN window.

Meanwhile, the British Pound Sterling fell against the dollar on Tuesday, June 26, after traders saw as dovish comments from incoming Bank of England rate-setter John Haskel about the uncertainty of the impact of Brexit on the economy.

Sterling fell as much as half a percent as Haskel, whose views on monetary policy are relatively unknown and who replaces a policymaker who has called for higher interest rates, spoke to the British parliament’s Treasury Select Committee.

The pound fell half a percent to $1.3208, still above its 7-month lows of $1.3102 plumbed last week. Sterling also gave up its gains versus the euro to 88.120 pence per euro as Haskel spoke.

“For me, the ‘depending on Brexit negotiations there may be at least a temporary lull in the economy,’ speaks volumes,” said Neil Jones, head of FX hedge fund sales at Mizuho, referring to Haskel’s comments.

Sterling had enjoyed a bounce off 7-month lows last week after a Bank of England meeting last week raised expectations of a rate hike in the coming months. But the rally has proved short-lived.

The British currency had already been under pressure on Tuesday as concerns about a growing trade conflict between the United States and other major economies limited investor appetite for risk.

Sterling traders were also refraining from taking out big positions before a European Union leaders’ summit later this week.