The Naira yesterday appreciated by N3 to close at N487 per US dollar from Tuesday’s N490, having traded for 495 per dollar last Friday when the market closed for the New Year holiday.
Towards the end of 2016, the Naira had stabilized at N485 against the dollar for about two weeks but fell on Friday to N495 at the parallel market, as the greenback’s scarcity worsened ahead of the New Year celebration.
The local currency, however, traded flat at the official interbank window and on the parallel market on the first trading day of the year, while stocks fell almost one percent in trading dominated by losses in petroleum, banking, and brewery shares.
The naira closed at 305 a dollar on the official window, the same rate it closed on the last working day of 2016. The currency initially traded at 315.50 to the dollar but gained after the central bank sold $1.5 million in the market.
On the parallel market, the naira maintained the trading rate at 490 to the dollar, the same price it was sold on Monday.
Earlier in the week, United Capital said in a research note to clients, “In the week ahead, we expect pressure on the naira to linger, especially at the parallel market, as unmet demand from the official market continues to stoke imbalances.”
Meanwhile, the nation’s external reserves had a balance of $25.781 billion by 29 December 2016, showing a decline of $3.288billion while compared with the $29.069 billion it stood by 31 December 2015, latest Central Bank of Nigeria (CBN) data has shown.
This is even as the apex bank reiterated its commitment to its pledge to ease the foreign exchange pressure on manufacturing and agricultural sectors through forward sales under the new flexible Foreign Exchange regime.
However, the latest foreign exchange reserves statistics represent a 12.7 percent decline year-on-year (y/y), but increased by 4.2 percent month-on-month, up from $24.69 billion on Nov.28 to $25.781, due to a slight recovery in global oil prices.
Despite demand pressure, the nation’s external reserves and the volume of money or other assets held by the central bank have recorded an increase of $642 million in one month, after weeks of consistent and gradual gains.
The increase now brings reserves to $24.57 billion as at November 24, up from $23.93 billion in the preceding month.
It also closed up a two-month decline to $247 million, after losing $836 million between September ($24.74) and October ($23.91).
All these are in spite of a US$2.3 billion decline in average inflows of foreign exchange into the CBN every month over the last 26 months according to the apex bank governor.
However, CBN disclosed in its data on foreign exchange utilization for October 2016, that it granted access to about 7,792 requests for foreign exchange, valued at over $867 million through the inter-bank window to enable them to source vital raw materials and spare parts for their respective industries.