Naira closes strong on pounds but remains weak to the dollar

The naira on Friday continued to lose steam against the dollar at the parallel market, in spite of the new forex regime, but it gained against the British pound. 

The Nigerian currency lost N4 to exchange at N351, from N347 it traded on Wednesday, representing a depreciation of 1.14 per cent.

The naira firmed against the pound sterling but weakened against the euro as it traded at N458 and N380, from N470 and N375 it exchanged on Wednesday.

At the interbank window, the naira spot rate closed at N282.03 to the dollar.

Traders at the parallel market said the scarcity of the greenback had forced the naira to depreciate further.

Evans Osabuohien, senior economist at Covenant University, Ota, Ogun state, said the flexible exchange rate policy might not influence the market in the short term since the demand for dollar is still high.

The don, who frowned at totally allowing the forces of demand and supply to determine the exchange rate, said a managed exchange rate policy is in the best interest of the economy presently.

“I don’t subscribe to leaving the nation’s exchange rate at the mercy of the forces of demand and supply because of the huge demand on the dollar,” he said.

“A managed floating rate has the advantage of creating a window beyond which the exchange rate will not exceed. It has elements of floating and also elements of control.

“In such policy, the invisible hand of government will be aiding the invisible hand of the forces of demand and supply.”