Confidence Inching Back to Nigerian Market, Forex Liquidity Improves – Thisday

dollar to naira

The decision by the Central Bank of Nigeria (CBN) to move towards a full free float of the naira, coupled with its roadshow in the United Kingdom and United States of America last month, is gradually yielding results as there was a perceptible improvement in liquidity on the interbank spot FX market last week, recording a turnover of $196.14 million, with an average daily volume of $39.23 million between July 25 and 29.

Market analysts who spoke to THISDAY on the development, confirmed that the improvement in turnover signalled growing liquidity in the official FX market on the back of growing investor confidence.

One bank treasurer, who preferred not to be named, said the average rate of the naira during five days of trading last week stood at N318.81 to the dollar, adding: “It is noteworthy that the CBN’s contribution to the market was only three per cent of the total volume that was traded.”

Yesterday, the naira exchange rate appreciated marginally on the interbank market to N316.37 to the dollar, stronger than the N321.16 at which it closed last Friday.

Indeed, analysts said they expected the naira to make more gains against the dollar on the interbank market, as bureau de change operators prepare to start trading FX in the next few days.
However, on the parallel market, the naira depreciated to N381 to a dollar at the close of business yesterday, down from the N378 to a dollar last Friday.