Business

Naira steady at N363/$ as Pound crashes lowest in weeks

Published

7 years ago

April 23, 2018

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The Nigerian Naira, at the weekend maintained same rate against the United States of American Dollar, at the parallel segment of the Nigerian Foreign Exchange Market.

The local currency exchanged at the rate N363 against the greenback at the black market. However, for those buying at the black market, the rate has fluctuated between N360 to $1.

Against at the British Pound Sterling, the Naira closed at the rate N510 at the black market and closed at the rate of N455 against the European Single Currency, Euro.

The Central Bank of Nigeria last week offered $210 million via the Wholesale Secondary Market Intervention Sales (SMIS); in its commitment to sustain liquidity levels and maintain stability in forex rate across all segments of the market. As a result, the naira was stable last week.

Meanwhile on the international scene, the British Pound Sterling, also at the weekend dropped another 0.3 percent to a two-week low after Bank of England Governor Mark Carney signalled that the central bank may not rush to raise interest rates in May because economic data was “mixed”.

The pound fell to a day’s low of $1.4037 GBP=D3, its lowest since April 6. On Thursday, sterling slid close to 1 percent and the British currency is now down 1.35 percent for the week.

Against the euro, sterling was flat on Friday at 87.72 pence per euro GBPEUR=D3.

The pound was widely tipped to perform well in April, when a seasonal rise in capital inflows into Britain from foreign companies paying UK shareholders dividends has previously boosted sterling during the month.

Investors had this week bid up the pound, one of the best performing major currencies in 2018, to its highest level since the Brexit referendum in June 2016, in part because of growing expectations the BoE would hike rates next month to curb inflation.

But weaker than expected wage growth numbers and inflation data this week encouraged Carney to tell the BBC on Thursday that the rate rise was far from certain and that there were other BoE meetings later in the year.

Analysts said some speculative money had probably bet on that pattern repeating itself, and investors were now rushing to unwind those positions, pushing the currency lower.