Market News
Naira Weakens Further To N1,750/$1 On Parallel Market - NEW TELEGRAPH
The naira fell sharply on the parallel market on Wednesday, dropping to N1,750 per dollar from N1,640/$1 on the previous day, forex dealers said.
New Telegraph’s findings showed that dealers generally quoted rates above N1,700 per dollar, with some quoting between N1,715/$1 and N1, 720 per dollar, while some International Money Transfer Organisations (IMTOs) quoted N1,745/$1.
According to analysts, the above N1,700 per dollar rates quoted by the dealers indicate that the significant gains made by the local currency last week, when it strengthened to N1,570/$1, may have been temporary.
Dealers attributed the naira’s slump to a sudden tightening of liquidity in the forex market occasioned by the activities of speculators.
New Telegraph had reported yesterday that the Central Bank of Nigeria’s (CBN) launch of its Electronic Foreign Exchange Matching System (EFEMS), on December 2, resulted in increased liquidity in the market, thereby boosting the naira.
The significant gains recorded by the naira last week led to speculators retreating from the market.
In the statement it issued on October announcing the plan to introduce the EFEMS, the CBN said that the new system was expected to enhance governance, transparency and facilitate a market-driven exchange rate that would be accessible to the public.
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“This development is expected to reduce speculative activities, eliminate market distortions and give the CBN improved oversight capabilities to effectively regulate the market.
“The CBN will publish real time prices and buy/ sell orders data from the system, and in collaboration with the Financial Markets Dealers Association (FMDA), publish the rules for the EFEMS,” the statement said.
Furthermore, in his address at the Chartered Institute of Bankers (CIBN) annual bankers’ dinner in Lagos on November 29, CBN Governor, Mr. Olayemi Cardoso, stated that EFEMS was a transformative step towards market transparency and price discovery.
