Naira Depreciates to N490/$ on Parallel Market

Naira Depreciates to N490/$ on Parallel Market

Naira Depreciates to N490/$ on Parallel Market

The naira depreciated to N490 to dollar on the parallel market yesterday, compared with the N485 to the dollar it closed last Friday.

THISDAY checks showed that the nation’s currency, which earlier depreciated to N487 to the dollar, slipped further as a result of strong demand for the greenback.

A trader attributed the high dollar demand observed in the parallel market to the activities of importers who have to make payments to bring in goods for end of year sales.

Meanwhile, the Central Bank of Nigeria (CBN) has asked banks to submit bids for a “special currency auction” to clear the backlog of matured outstanding dollar obligations for selected sectors of the economy, traders said on Monday.
The central bank instructed commercial lenders to submit backlog dollar demand from fuel importers, airlines, raw materials and machinery for manufacturing firms and agricultural chemicals by 1500 GMT for a special forex intervention, Reuters disclosed.

Traders said the central bank plans to sell “funded forwards of two to five months tenor” dollars to the targeted sectors at an auction ahead of the closure of the forex market for the year.

The central bank is expected to close all foreign exchange transactions this Friday ahead of its financial year end and the Christmas period. The naira currency has traded around N305.5 to the dollar on the official interbank market since August.

Two weeks ago, the bank had asked commercial lenders to submit bids for a special intervention auction targeting fuel importers, but the result of the auction has not yet been released, traders said.

On Monday, the Nigerian National Petroleum Corporation said it had imported about 38.7 million litres of aviation fuel, which it said “represented about 26-day sufficiency”, as part of its “ensure a hitch-free air travel across the country during and after the yuletide period”.

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