Naira responds to CBN’s FX measures at parallel market, BDC
June 30, 2015 | 9:10 am| | | Start Conversation
Naira has began to respond to the Central Bank of Nigeria’s (CBN) foreign exchange measures, as it lost N2 or 0.89 percent against the US dollar at the parallel market, on Monday.
The nation’s currency also weakened by the same amount against the dollar at the Bureau De Change segment of the foreign exchange market.
The CBN has exclude importers of some goods and services from ac- cessing foreign exchange at the Nigerian foreign exchange markets.
After trading on Mon- day, the local currency closed at N227/$ and N225/$ at the parallel and BDC, respectively, compared with N225/$ and N223/$ traded on Friday last week, Busi- nessDay survey has re- vealed.
Meanwhile, the nai- ra gained N0.02 or 0.01 percent at the inter- bank market, closing at N197.39k/$ as against N197.41k/$ on Friday last week, data from Fi- nancial Markets Dealers Quotations (FMDQ) have indicated.
Razia Khan, manag- ing director, head – Af- rica Macro, Global Re- search, Standard Char- tered Bank, had said “if spreads between the parallel market and the interbank market widen, it raises the risk of round tripping, and creates other distortions in the economy.”
The most liquid 5-year bond yield rose 12 basis points to 14.71 percent, up from 14.31 percent the day before the bank unveiled the currency rules but below 15.5 per- cent on the eve of the presidential election in March, Reuters reports.
The 10-year bench- mark yield rose 10 basis points to 14.25 percent on Monday, up from 13.75 percent before the central bank measures and below 15.38 percent on March 27. Currency and bond markets in Africa’s top oil producer have been on the ropes since the price of oil, Nigeria’s main ex- port, plunged last year.
The central bank has spent more than $3.4 billion to defend the currency and fixed the exchange rate in Febru- ary to curb speculation. But the outlook remains negative, traders said.
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