The naira’s outlook remains stable in the near term as the Central Bank of Nigeria’s efforts to improve dollar liquidity and achieve exchange rate convergence yield positive results.
But investors remain concerned over the lack of a flexible exchange rate.
The naira firmed to about 305.60 to the dollar on the interbank market on Thursday from 306.25/dollar last week and was quoted at 390/dollar on the black market, better than the 391 level where it traded last week, Reuters reported.
It was quoted at 382.63 per dollar in the period enabling foreign exchange trading at rates set by buyers and sellers, according to the market regulator, FMDQ OTC Securities Exchange.
“We expect the naira to trade within the prevailing band in the coming days, but investors are still worried over the multiplicity of exchange rate in the market,” one senior currency trader said referring to the multiple exchange rates.
The bank has been intervening aggressively since February to try to narrow the spread between the official and black market rates and has sold more than $4bn.
A currency expert at Ecobank Nigeria, Mr Kunle Ezun, believes the CBN’s policies are yielding result. He said the foreign exchange window tagged ‘Investors/Exporters FX Window’’ created by the apex bank recently was a good development.
Ezun, however, said it was too early to determine the amount of forex inflows through the window.
Meanwhile, Zambia’s kwacha is expected to firm next week on increased dollar supply in the market ahead of a government bond sale, while the Kenyan shilling is seen slipping on a dollar squeeze amid increased demand from oil importers and general merchants.
Ghana’s cedi is expected to remain firm against the dollar next week on central bank support and positive market sentiments that have led to improved interbank greenback inflows, Reuters reported quoting analysts.