The Naira rose more in the parallel market yesterday to N1,610 per dollar, up from N1,615 per dollar last Friday, as sluggish dollar demand persisted. However, the Naira fell to N1,495.6 in the official market.
According to FMDQ data, the indicative exchange rate for the Nigerian Foreign Exchange Market (NFEM) increased to N1,495.6 per dollar from N1,474.78 per dollar last weekend, indicating a naira devaluation of N20.82.
As a result, the gap between the parallel market and the NFEM rate shrank to N84.4 per dollar from N141.4 per dollar last weekend. The foregoing event represented an N45 appreciation for the naira in conjunction with N1,655 per dollar last week Monday.
Similarly, on the official market, the Naira increased by N37.9 from N1,533.5 last Monday. Currency traders revealed to Vanguard that the weak dollar demand pushing Naira appreciation is caused by the Chinese New Year vacation as well as the market reaction to the Central Bank of Nigeria’s (CBN) publication of the foreign exchange code last week.
A top representative of the Association of Bureaux De Change Operators of Nigeria, ABCON, confirmed the occurrence, adding that several currency traders with large dollar holdings sold in anticipation of a drop in demand and exchange rate, increasing supplies into the market.
An investigation also indicated that banks provided further boost to dollar supplies. According to a top bank official, banks are currently accepting customer requests for Personal Travel Allowance (PTA) and Business Travel Allowance (BTA). The official noted that this began last week and that most banks previously did not honour these demands.
