Naira drops further to 492/$1 at parallel market

Following the prediction by some financial analysts that the naira may hits N500 to a US dollar at the parallel market, the Nigerian local currency on Wednesday January 11 fell further by one point to close at 492 per dollar against 491 it was traded on Tuesday.

In the early hour on Wednesday, the naira was sold at 486 to a dollar but closed at 492, while Euro and Pound Sterling were sold in the morning at 511 and 590 but closed at 510 and 592 respectively.

The local currency at the beginning of the week appreciated at the parallel market after about two weeks of losses, gaining 3 points to exchange at N490, from N493 it posted last Friday, while the Pound Sterling and the Euro traded at N600 and N506, respectively.

At the Bureau De Change window, the Naira closed at N399, CBN rate, while the Pound Sterling and the Euro traded at N599 and N510, respectively.

Trading on the floor of the inter-bank market saw the Naira stable at N305.00.

The Naira had exchanged around N490 in spite of speculations that it would hit the N500 to a dollar mark.

However, a group of analysts at Financial Derivatives Company (FDC) Limited in their outlook for the naira in 2017 believed that the local currency under the current market regulatory framework will remain under pressure, unstable until the market is allowed to operate freely and efficiently.

In a bid to reduce gap between the official interbank rate and black market rate, Bureau De Change (BDC) operators in the country on Tuesday set their first ever reference exchange rate for the local currency at 399 to a dollar.

A development, forex dealers believed would reduce the wide gap between the official interbank and retail foreign exchange rates.