March 27, 2017
The gap between the official and the black market rates narrowed at the weekend, after the local currency firmed to N380 per dollar on the black market on Friday.
On the official interbank market, the currency was quoted N307 over the weekend. February's partial devaluation effectively created multiple exchange rates in the economy.
The naira, in recent months, exchanged at over N510 to dollar, until the Central Bank of Nigeria (CBN) began massive interventions in the market.
The figures showed nearly three per cent appreciation from the previous sessions and near the CBN rate for consumers, traders said.
The CBN, in a statement at the weekend, said it received bids for $81 million from authorised dealers last Friday after it offered to sell $100 million in currency on Thursday.
The bank has been intervening in the official market to narrow the currency spread with the black market rate, which was N520 to the dollar a month ago after it devalued the naira for retail customers to N375.
Meanwhile, for the first time since the dollar scarcity started, the CBN recorded $19 million surplus after it intervened in the interbank market.
The development occurred after the CBN pumped $100 million into the interbank to meet demands at the retail end of the market, out of which authorised dealers were only able to pick $81.347 million after an initial bid for $91 million.
Commenting on the offer, the Acting Director, CBN's Corporate Communications, Isaac Okorafor, attributed the inability of authorised dealers to pick up the entire offer of the apex bank to increasing dollar supply and sense of apprehension among dealers, who anticipate a further crash in dollar rate.
He reiterated the determination of the CBN to sustain its current interventions in the market. According to him, "those who doubt the capacity of the Bank to sustain the intervention in the forex market are beginning to have a change of mind".
Meanwhile, reports from Abuja and Lagos over the week indicated that the naira sustained its bullish ride against major currencies, especially the United States (US) dollar, which exchanged at an average of N385 to dollar.
This has triggered further apprehension among speculators, who anticipated further losses given the continued crash of the dollar.
With the naira closed at N307 to dollar on Friday to the official market, and the parallel market rate continued to slide, the optimism of the CBN Governor, Godwin Emefiele to achieve the convergence of forex rates between the Interbank and the bureaux de change markets appears to be on the horizon.