Naira Gains 9.7% At Parallel Market

The naira appreciated on the parallel market on Tuesday. It gained 9.65 per cent against the dollar.

Forex traders attributed the appreciation of the currency to Central Bank of Nigeria’s (CBN’s) plan to restart forex sales to Bureaux de Change.

The naira, which had weakened to a low N480 at the black market in recent months, firmed from its previous trade of N477 on Friday.

On Monday, traders at the black market refused to show quotes as panic set in following the central bank’s announcement about retail currency operators last Thursday.

On the official market, supported by the apex bank, the naira was quoted at 381, where it has been stuck since July. It traded at N386.03/$ on the over-the-counter spot market.

Dollar shortages have plagued the local currency market after the coronavirus pandemic triggered an oil price crash, slashing government revenues, weakening the naira and widening the country’s funding need.

The naira had been hitting new lows at the black market since 15 per cent devaluation in March, which coincided at a time when the CBN suspended dollar sales to the market due to lockdown to slow the spread of the coronavirus.

With the sharp rise on Tuesday, traders doubt whether the CBN will be able to meet pent-up demand on the currency built after it suspended forex sale.

Reserves are dwindling and sales to foreign investors are yet to resume.