Naira weakens to 367/dollar

The naira weakened to 367 per United States dollar at the parallel market on Wednesday, after closing flat at 365/dollar in the past one week.

This was despite a $250m injection into the foreign exchange market by the Central Bank of Nigeria on Monday.



A breakdown of Monday’s intervention indicated that the wholesale sector was offered the sum of $100m, just as the Small and Medium Enterprises window received a boost of $80m.

Those requiring foreign exchange to address needs such as Business/Personal Travel Allowances, school tuition, medicals, etc. were allotted the total sum of $70m.

The CBN has managed to keep the exchange rate within the 365/dollar to 370/dollar band in the past few months, thanks to its billions of dollar worth of market interventions.

The central bank had also two week ago reportedly injected $297m into the Retail Secondary Market Intervention Sales segment, raising the total intervention for the week to the sum of $547m.

Last week, the regulator also injected $250m into the market.

Analysts believe the reason the local unit has not appreciated significantly against the greenback is because the CBN has reduced the value and frequency of its interventions in the forex market.

The bank’s spokesman, Isaac Okorafor, hinged that the economy’s recent exit from recession to the regular intervention of the CBN in the forex market.

He added that the timely execution and settlement for eligible transactions as well as the forex available to the real sector and industrial capacities were factors that boosted the economy.

But analysts believe that improvement in the oil sector in terms of output and price led the economy out of recession in the second quarter of this year.

The National Bureau of Statistics report last Tuesday showed that the economy recorded a positive growth of 0.55 per cent in the Q2.

The positive growth, which took the country out of recession, was the first in the past six quarters.

The economy had recorded five quarters of negative growth.