Naira gains at I&E market; stable at parallel market

Data from FMDQ Securities Exchange shows that naira recorded a gain against the U.S. dollar at the Investors & Exporters window (I&E) of the foreign exchange market on Tuesday.

The currency closed at N393.35, 0.12 per cent higher than the rate at which it was exchanged at the previous session, which was N 394.67.

The appreciation in the value of naira came as turnover declined by 61 per cent, with $26.8 million recorded compared to the $69 million posted on Monday.

Naira touched an intraday high of N390 against the greenback and oscillated to a low of N396 before settling for a close at N393.35.

On the parallel market, data from abokiFX.com shows that the naira to dollar exchange rate closed at N475, the same rate at which it changed hands on Monday.

That leaves a spread of N81.65 between the black market and I&E window rates, meaning a 17.2 per cent gap in exchange rate separates both markets, even though Godwin Emefiele, the Central Bank of Nigeria (CBN) has disdained the significance of the informal currency, saying it is “illegal.”

“We do not agree that the determining factor for our currency should be based on a market that is tainted, where people go to offer bribes,” Mr Emefiele said at the November monetary policy committee meeting.

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The CBN’s official rate on Tuesday was N379 to the naira.

The International Monetary Fund and the World Bank group have enjoined the regulator to enhance greater flexibility in its preferred window by unifying Nigeria’s multiple exchange rates around that used by the I&E window.

That forms part of the preconditions for a $1.5 billion loan Nigeria has been pursuing at the Washington-based bank for nearly a year.