Naira Rebounds as Dollar Tumbles at Parallel Market

The naira sustained its appreciation against the United States dollar at the parallel market as it appreciated on Friday, from N1, 160 to N1,155.

This represents a 0.43 percent (N5) gain than N1, 160 exchanged on Thursday at the parallel market.

It would be recalled that the naira had steadied in the parallel market on Wednesday and Thursday as it sold for N1,160 respectively.

However, the forex turnover on Thursday hit $105.50 million according to data from NAFEM, the Nigerian Autonomous Foreign Exchange Market, the market trading segment for investors, exporters and end-users.

The turnover represents the amount of dollars traded at a particular trading day.

Although the rate is still unpalatable to the business community and Nigerians at large, but a management consultant, Babatunde Adeniji, said the naira crisis was being largely driven by speculation following the country’s liquidity challenge.

“In terms of price, for the short time it is speculation that drives things. If you are a trader and you want to take a bet, with the level of distrust of the government, with no clear visible assurance of where the dollar is coming from to stabilise the naira, which position would you take? You are bound to take the position skewed towards the dollar,” he stated.

Adeniji said the country would begin to heave a sigh of relief when the authorities could pay up all the backlog of foreign exchange forward with sufficient liquidity to meet pending obligations.

“Nigeria, as a country, does not have enough dollars to meet its promise. If we don’t do things that are substantial and visible, all that grammar would not help,” he said.

Source:The Guardian