Naira appreciates, hit N1,735/$ in parallel market

The Naira appreciated to N1,735 per dollar in the parallel market from N1,740 per dollar last weekend. 

The Naira however, depreciated to N1,690.37 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM.

Data from FMDQ showed that the indicative exchange rate for NAFEM rose to N1,690.37 per dollar from N1,652.25 per dollar last week Friday, indicating N38.12 depreciation for the naira.

The volume of dollars traded (turnover) in the market declined by 41.6 percent to $173.14 million from $296.63 million sold last weekend.

Following the market indices, the margin between the parallel market and NAFEM rate narrowed to N44.63 per dollar from N87.75 per dollar last week Friday.

The Apex Bank planned to launch an automated foreign exchange (forex) trading platform in December to improve confidence and forex market transparency. The move is to remove issues in FX delivery to the right sources for eligible payments.

Last week, as part of an effort to keep naira falling in check, the CBN sold about $144 million to authorised dealer banks in the range of N1640 and N1650.

According to MarketForces Africa, the latest spot rate pricing suggests the CBN has seen the end of its price discovery after devaluation. Still, exchange rate convergence remains an illusion, perhaps a tall ambition over unharmonised policy for parallel and official markets.

A sustained forex liquidity shortage had plunged the exchange rate to N1,689 per US dollar at the Nigerian autonomous foreign exchange market earlier in the week before it recovered post-forex sales to authorised dealer banks.

In the past, the CBN has always offered subsided spot rates at its forex auctions to redirect the exchange rates in the official and informal currency markets.  Supporting the weekly gain, AIICO Capital Limited said a notable influx of capital from foreign portfolio investors was directed towards high-yielding government securities.

On trading pattern, activity level at the Nigerian autonomous forex market surged as average turnover rose by 154.6 per cent week on week to close at $527.5 million, Afrinvest Limited said in a note. Analysts said trades at the autonomous forex market were consummated between N1,609 and N1,698.50 last week amidst mixed outings in the forex forward market.