Nigeria’s naira gains against the dollar, as CBN closes in on currency speculators

The Nigerian currency (the naira) gained against the dollar on Monday by selling at N441 to a dollar at the parallel market.

Note that the N441 exchange rate is stronger than N450 to a $1 that was posted on Friday May 29, 2020.

Meanwhile, this is naira’s first major gain against the dollar since late March. The development follows concerted efforts by the apex bank to disrupt the activities of currency speculators.

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Just recently, the CBN Governor, Godwin Emefiele, issued a stern warning to currency speculators and hoarders. He also advised Nigerians to desist from patronizing black-market currency operators. According to him, the rates they are buying the dollar from the black market are unrealistic. Therefore, there is high probability they will lose their money if they continue to do so.

Recall that the CBN recently re-started the weekly dollar sales of $100 million for small businesses and individuals who are in genuine need of Foreign exchange. Reacting to this, the Team Lead at CardinalStone Research, Philip Anegbe, had told Nairametrics that the pressure on the naira is expected to ease soon.

“I believe some of the recent pressures on FX is driven by speculators’ panic responses to weakness in dollar earnings, the decline in FX inflow through the I and E window, and suspension of dollar sales to BDCs.

“The imminent resumption of BDC activities is therefore likely to slightly ease naira pressures in the parallel markets, but we believe the underlying medium-term fundamental concerns facing the naira still remain,” he said.