The value of the naira continued to gain value on the parallel market selling at N473 as liquidity crunch saw the value of the currency decline on the Investors and Exporters window to N409.67 to the dollar yesterday.
The gap between the value of the naira on the streets and the Investors and Exporters (I&E) window is gradually closing as the local currency gained value on the parallel market whilst losing value on the Nigeria Autonomous Foreign Exchange (NAFEX) market also known as the I&E window.
From N480 to the dollar which it had declined to on the parallel market, the value of the naira rose to N473 on the street but it gradually depreciated on the I&E window where fit now hovers between N410 and N422 to the dollar.
Since late last week, the value of the naira on the I&E window which is determined by market forces has been selling as high as N422.99 to the dollar and as low as N390 in between trades, although the highest it has closed was on Monday when it closed at N409.67.
Turnover had dropped from $96.5 million on Friday to $28.21 million on Monday. The rates at which the Bureau de Change (BDC) operators sell to travellers as well as for medical and school fees however remained at
According to the national president of the Association of Bureau de Change Operators of Nigeria (ABCON) Aminu Gwadabe, the decreasing value of the naira on the I&E window is due to the tight liquidity in the market.
The Central Bank of Nigeria (CBN) sometimes intervenes in the market but in recent times, liquidity had been strung tight. Gwadabe noted that the N422 value which it is at the I&E is reflective of the predictions of foreign investors.
Investors, he said had predicted a N420 to N450 true value for the naira this year.
“The only way we can attract foreign investors is when they get the true value of the naira. There is liquidity issue in that window despite the CBN interventions. The only way foreign investors can come is the true value of the naira can be determined. From their predictions they have achieved it. Their prediction is between N420 and N450,” he said.