Naira stable at 283 as drama continues at parallel market

The Nigerian naira has attained apparent stability at the interbank market, trading at N283 for the better part of Tuesday.

The naira opened at 253 to the greenback on the new official market in Monday, but closed its first trading day of the new regime at 281.85 after hitting a daily-high of 283.

The Central Bank of Nigeria (CBN), in a bid to engender clarity in the market, sold $4.02 billion worth of forex to 21 banks in order to clear the backlog of existing demands.

After CBN sales of $4.02 billion, the naira took a downward swing from 280/$1 to 283, with some appreciation at the parallel market.

In anticipation of the new regime, the naira appreciated dramatically on the parallel market, with dealers losing over N50 on every currency in their possession.

Isiaka Baba, a trader in Lagos who spoke to TheCable said: “The way the naira is going now is unprecedented, many traders have lost on all currencies. Dollar is selling at 330, and may go as low as 250 before the end of the day.”

“Euro that we buy at 400 is now selling near 300, while the pound is moving close to 400, from its position at 500, just last week.”

On Tuesday however, the dramatic movement continued at the parallel market, with the naira opening the day at 347/$1, only to end the same day at 337.

The naira appreciated to 475 against the British pounds, while the Euro moved slightly to 388 to 387.

Traders said they do not understand why the Euro has failed to follow the appreciation trend seen with the dollar and pound.

The central bank remains “reasonably optimistic” that the naira will settle at 250 against the dollar.