Naira recovers to 340 per dollar

The naira firmed again on Tuesday to trade at 340 against the dollar at the parallel market from 370 on Monday, but traders differ on reasons for the appreciation. 

The official market rate remained at 197, with President Muhammadu Buhari’s insistence that the currency would not be devalued.

Speaking with TheCable in Lagos, Bureau de Change (BDC) operators gave varying reasons for the appreciation of the naira.

A BDC agent, who asked not to be named, said the N35 million deposited by BDCs to the central bank of Nigeria (CBN) has been refunded, easing capital tension in the market.

“We have collected our N35 million, so we have more money to do business with. We can approach some of our sources with money to get dollars,” he said.

However, Musa Tairu, another BDC agent, differed in opinion, saying the appreciation of the naira was due to a drop in demand for dollars by most “big companies”.

“Giving us our N35 million doesn’t make any difference now. It depends on the demand and the supply,” Tairu said.

“Initially, when our N35 million was with them, we still had our own capital we used for our business. Demand determines the market price.

“Most of these big companies are not buying for now. They are really running on a loss. All these BUA, like all these Dangote and co.

“The price is not favourable at all. By the time you buy for 390 or three eighty something, the sugar we use to buy for N8,000 now they are selling it N15,000, and people are managing, they are all complaining that it is much.

“So all the companies say for now, there’s no buying of anything, they would just be selling the ones they have.”

The naira hit all-time highs last week but has been recovering as certainty returns to the market.