Standup9ja - Naira at six-month high on black market,
traders say
The Nigerian naira gained 1.1
percent to a six-month high of 430 per dollar on the black market on Wednesday,
traders said.
The central bank has been
intervening on the official market to try to narrow the currency spread with
the black market rate, which was 520 to the dollar a month ago.
The naira was quoted at 307.50 on
the interbank market on Wednesday.
"The regular intervention by the central bank has increased
liquidity in the official market. The new policy has also eliminated spurious
demand for the dollar," Aminu Gwadabe, the head of Nigeria's
exchange bureaus, told Reuters.
Speculators betting on a naira fall
"are taking a risk and will lose," central bank Governor Godwin
Emefiele said on Tuesday. He added that he expects the black market rates to
narrow further.
On Wednesday, the cost of insuring
Nigerian debt against default fell to its lowest since December 2016, with
five-year credit default swaps dropping to 603 bps, down 9 bps from Tuesday's
close, according to data from IHS Markit.
"We see the naira stabilising
around 380-400 to the dollar, but the central bank must review the multiplicity
of rates to restore confidence in the market," Gwadabe said.
In February the bank devalued the
naira for private individuals, saying it will sell dollars to them at 375 per
dollar, a 20 percent margin from the official rate and half the premium
obtained at the black market.
The move has left the West African
nation with at least five exchange rates - the official one, a rate for Muslim
pilgrims going to Saudi Arabia, the one for school fees abroad and a retail
rate set by licensed exchange bureaus at 399. (REUTERS)
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