Naira Firms up on Moderate Dollar Demand

The naira firmed against the United States dollar at both the bureaux de change (BDC) and parallel market segments Monday as a result of moderate demand for the greenback.
The nation’s currency maintained its worth at the BDC and parallel markets where it closed at N162 to a dollar and N163 to a dollar respectively.
However, details of transactions at the Central Bank of Nigeria (CBN)- regulated Retail Dutch Auction System (RDAS) held yesterday showed that the naira depreciated slightly by nine kobo to close at N155.90 to a dollar. The 20 banks that participated in the auction bought a total of $299 million, out of the $300million offered by the CBN.
But at the interbank market, the appreciated marginally by six kobo as it closed at N159.70 to a dollar, compared to the N159.76 to a dollar it closed last Friday.
Speaking in Washington DC recently, the CBN Governor, Mallam Sanusi Lamido Sanusi said: “The naira has been fine. We are trading within our band of -+3 per cent. We have maintained a stable exchange rate throughout the crisis and the whole currency turmoil around the world.
“If you look at all emerging markets’ currencies, starting December till now, the Indian rupee, Brazilian riel, the Ghanaian cedi, the South African Rand you find that most of them have lost between 10 or 20 per cent of their value.
“The naira lost a maximum 2.3 per cent and it is actually back to being within the range. So it has been stable and we have done that without losing too much in terms of reserves. Now obviously, we have had to tighten money, increase cash reserve requirement, increase the rate at which banks lend to each other and lend to customers. But that is the price you pay for stability. So even when we had the pressure on the naira, the pressure was not coming as a result of a major reversal in capital inflows.”

Posted by SirVic for wetopup(News Laboratry)