25 February 2016, Lagos – The naira rose further on Wednesday against the United States dollar at the parallel market to 300 from 310 on Tuesday.
The local currency, which closed at 391 against the greenback last Thursday, had risen to 375 and 310 on Monday and Tuesday, respectively.
While linking the recent gain recorded by the naira to significant supplies of forex to the market, forex dealers said the losses recorded by the local currency in recent weeks were “artificial and fuelled by the activities of currency speculators.”
However, a bureau de change operator at the Lagos airport, Mr. AbdulSalam Quadri, said the naira gained marginally on Wednesday, compared to what it gained on Tuesday, because forex supplies to the market were drying out gradually.
He said the local currency might not record any significant gain in the coming days.
However, other forex dealers said the naira might gain further and settle around 260 against the greenback at the parallel market.
“The dollar supply in the market is reducing; however, the naira may gain further significantly before reaching equilibrium,” a BDC operator in Agege, Lagos, Mr. Rotimi Lawal, told our correspondent.
The local currency began its recovery after President Muhammadu Buhari had reiterated its stance not to devalue the local currency on Saturday.
But economic and financial experts said the gains recorded by the naira might not be sustainable in the long run, adding that as demand continued to soar at the parallel market the local currency might plunge further.
The economy of Nigeria, Africa’s largest oil exporter, has been battered by the plunge in global oil prices.
The nation depends on crude oil for over 90 per cent of its forex earnings. The fall in the fortunes of the naira at the parallel market has affected industries.
The CBN has been rationing dollars as part of the measures to preserve the external reserves, which have hit an 11-year low of $28bn.