Naira closes at 385/dollar
The naira closed flat at 385 against the United States dollar on the parallel market on Wednesday, the same rate it closed on Tuesday.
This came two days after the Central Bank of Nigeria injected $457.3m into various segments of the forex market.
The central bank has continued to supply into the foreign exchange market.
The local unit had closed at 390/dollar daily consecutively between last Tuesday and Friday, before appreciating to 386 on Monday.
The naira closed at 305.60 to the dollar on the interbank market on Wednesday.
According to financial and currency experts, the naira’s outlook remains stable in the near term as the regulator steps up efforts to improve dollar liquidity and achieve exchange rate convergence.
The CBN has been intervening aggressively since February to try to narrow the spread between the official and black market rates and has sold more than $4bn.
The CBN had on Monday said that a lull witnessed in the forex market was meant to be terminated by the injection of $457.3mn into the market.
The regulator said a breakdown of the offer indicated that both spot and forwards garnered the sum of $267.3m while the wholesale segment got $100m.
Also, the SMEs and invisibles segments comprising of basic travel allowance, tuition fee and medical got $50m and $40m respectively.
Experts believe the CBN has yet to get it right in terms of its forex policies.
Experts including a former Governor of the CBN, Prof. Charles Soludi, said there was a need to unify the exchange rate, remove the 41 items banned on the official interbank forex market and carry out some major reforms to get the economy back on track.
He said by the latest policies, the CBN had made 15 steps forward but was still behind by 90 steps considering what needed to be done to get the economy on track.
The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said the CBN might get an effective exchange rate in the second half of this year.
The Global Economist, Renaissance Capital, Charles Robertson, described the official rate of the naira as a “fair value”
He suggested that the value might need to be weaker to attract foreign investors into the country.
According to Robertson, exchange rate issues are making Nigeria to underperform its peers in East Africa.Punch