Naira Maintains Gain at the Parallel Market

Naira has continued to maintain its gains amid a weak buying pressure of the dollar in the black market.

Naira continued to strengthen on the black market to trade at N650 to a dollar. This is however coming few days after some security personnel stormed a Bureau De Change hub in Abuja.

How has the Currency been Faring?

The value of naira to a dollar has continued on a devaluation trajectory for a long time now, the worst ever witnessed in the history of the nation’s foreign exchange. But the value of the exchange rate became an issue of concern, last week, when a dollar exchanged for as high as N710, demonstrating the currency increase of N50 to the dollar in a matter of days.  

In an attempt to tame the continuous rise in the price of dollar, operatives of the Economic and Financial Crimes Commission, EFCC raided Wuse Zone 4, a BDC hub in the federal capital territory over allegations of some BDC operators mopping up foreign currencies.

According to reports, the invasion was a convert operation to dislodge currency speculators who were alleged to be massively mopping up available foreign currencies.

 Any Hope for Naira?

Since the start of the week, naira has strengthened against the US dollar significantly more easily in all facets of the foreign exchange market. The currency witnessed a relative relief against dollar across all segment of the Forex market after the devaluation induced panic buying of dollar in July.

At the official market, naira gained by 0.03% to settle at N428.88 to a dollar as at Monday August 1, according to data on FMDQ OTC.

What exactly is the cause of the pressure on Naira?

Although there are local and global viewpoints on the pressure on Naira, the demand for foreign exchange goods and services has remained constant, posing s demanding challenge.

In addition to damaging investors confidence and reducing foreign exchange inflows into the country, Nigeria’s worsening security situations is also damaging the economy by pushing prices of fuel subsidies as well as increasing oil theft.