The naira took a strange turn on Wednesday, trading at varying prices across different sections of the parallel market, appreciating by the highest leaps in 2016. The “official rate” of the black market is now completely unpredictable as various sellers are quoting different prices.
Traders told TheCable that the uncertainty in the money market is forcing buyers and sellers to trade at desperate prices. “What we are seeing now is a little different from what we have been having in the past, but I am still selling with 301 to 310,” one of the traders said.
“Some, in other markets are selling at some other prices. But the dollar I have goes for 310. Those selling below 300, some 280, know where they got theirs from.” Aminu Gwadabe, the head of the association of Nigeria’s bureaux de change (BDC) operators, told Reuters that “the market is reacting to the president’s ‘no devaluation’ stance”.
As at Friday, the naira traded above 390 to the dollar, only to come down to 370 on Monday after Ifeanyi Ubah of Capital Oil said he could restore the naira to 200 against the greenback. On Tuesday, the naira appreciated more to 340 against the dollar, recording its highest positive leap in 2016.
The naira went on to break its own record on Wednesday with another giant leap from 340 towards the 300 mark. Traders say those keeping dollars for the “more expensive days are coming out to sell to us. They can’t tell what it would be tomorrow.”
On Tuesday, TheCable gathered that “big companies” are deciding to boycott purchase of dollars on parallel market, claiming it was not profitable, thereby reducing demand for the dollars. President Muhammadu Buhari remains resolute that the naira would not be devalued. (The Cable)