Naira falls at parallel market amid World Bank caution

Naira fell significantly against the U.S. dollar at the unofficial market, but gained slightly at the Investors & Exporters (I&E) window on Friday.

This occurred amidst caution from the World Bank urging the adoption of a more predictable foreign exchange management system in Nigeria.

The bank in its bi-annual Nigerian Development Update said the Central Bank of Nigeria’s management of the foreign exchange regime was a fundamental cause of the nation’s foreign exchange crisis.

It noted that the way the exchange rate was managed limited access to foreign exchange and thus adversely affected investor confidence and investment appetite.

According to data posted on abokiFX.com, a website that collates parallel market rates in Lagos, the naira closed at N498.00 per $1 at the black market after recording a major gain in the previous session on Thursday.

Friday’s performance represents a N5.00 or 1.01 per cent devaluation from N493.00 the rate it traded in the previous session on Thursday.

However, the domestic currency gained slightly at the Nafex window (I&E).

Data posted on the FMDQ Security Exchange where forex is officially traded showed that the naira closed at N411.00 per $1 at the Nafex window.

This represents a 0.12 per cent appreciation from N411.50 the rate it traded in the previous session on Thursday.

The official market segment saw a forex turnover of $74.81 million, this translates to a 45.80 per cent decrease from $138.20 million posted in the previous session on Thursday.

The domestic currency reached an intraday low of N413.67 and a high of N396.45 before closing at N411.00 on the dot on Friday.

This leaves the spread between the black market and official market rates at N87.00, translating to a margin of 17.47 per cent as of the close of business on Friday.