Naira rebounds to N744/$ at official market

The closing rate represents an N24/$ gain from Friday’s N768/$ rate.

Market reports showed the naira exchanged at N790/$ at the parallel market, leaving the N46/$ gap between the official and parallel market rates.

Analysts also said Friday’s low closing rate at the I&E window attracted forex buyers interested in getting the greenback at cheaper rates to that segment of the market.

The Central Bank of Nigeria (CBN) unified all exchange rates into the I&E window and allowed market forces to determine exchange rate for the naira.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, expressed concerns about the expanding gap between the official and parallel market rates.

He said the financial sector regulator should find ways to continually narrow the gaps, including bureaux de change operators in the forex market operations.

He advised the CBN to ensure liquidity in the retail end of the market by de-monopolizing diaspora remittances and stronger collaboration with BDCs which control the retail end of the forex market.

Other market analysts from FutureView Securities said forex unification hopes are also being frustrated by the sustenance of the list of 43 items restricted from accessing forex at the official market.

Originally compiled by the CBN in June 2015, the list of items ineligible for forex was intended to manage foreign exchange resources and encourage domestic production.

On his part, former Executive Director, Keystone Bank Limited, Richard Obire, said a key attraction of the alternative market is its “hassle free”, almost zero documentation feature.

He said it will always have that edge over the formal market for certain types of buyers and sellers.

“When supply increases sufficiently to bring forex trades prices down to a stable range, then we may see more people moving into the formal segment of the market.

‘’At this point, buyers will probably place reduced value on the “no documentation” feature of the alternative market and see more attraction in the better price they can get in the official market,” he said.