Naira bounces back, gains advantage over Dollar

the Naira

Naira and Dollar

By Lydia Ngwakwe

The Naira on Tuesday appreciated at the Investors and Exporters window, exchanging at N418.25 to the dollar.

The Naira gained 0.18 per cent to the dollar, compared with the N419 traded on Monday.

The open indicative rate closed at N417.70 to the dollar on Tuesday.

An exchange rate of N444.00 to the dollar was the highest rate recorded within the day’s trading before it settled at N418.25.

The Naira sold for as low as 412 to the dollar within the day’s trading.

A total of 234.54 million dollars was traded in foreign exchange at the official Investors and Exporters window on Tuesday.

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Meanwhile, Prof. Hassan Oaikhenan of the Department of Economics, University of Benin, Benin-City, has attributed the currency’s gains to the tighter restrictions the CBN had placed on access to the green back by Nigerians abroad.

He said, “What is not clear, however, is the factors underlying the isolated cases of the bouts of the slight appreciation the naira has enjoyed in the official forex window, especially recently.”

Oaikhenan said, “For example, the CBN, recently limited the amount that could be accessed in PoS transactions to $50 instead of $100. Small as it may seem, it has the capacity of saving much forex in the aggregate, by curtailing access to the dollar, using the PoS platform.

“Another possible reason is that the supply side of the foreign exchange market may have been receiving a boost as we enter the election season.

“It could be politics-induced spending by politicians, some of whom had stashed away humongous amounts of money in both the local and foreign currencies, in all likelihood, from our common patrimony, and thus at our collective expense and at the expense of our country and our economy!

“While this perspective, for now, lies within the realm of conjecture, anecdotal evidence, based on past experiences, appears largely to corroborate the assertion that the fortunes of the exchange of the naira tends to improve in the run up to elections in the country,’’ he said.

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