Naira firms up at interbank market

The Naira has appreciated marginally against the dollar at the interbank market, gaining 25k to exchange at N305, as against N305.25 which was traded on Tuesday.
However, trading activities on the floor of the Bureau De Change saw the Naira sold at N399 to a dollar, which was the Central Bank of Nigeria controlled price, while the Pound Sterling and the Euro closed at N585 and N506 respectively.
The Naira continued to slide at the parallel market, closing at N480 to a dollar, while the Pound Sterling and the Euro traded at N580 and N505 respectively.
Traders at the market said they have been trading under acute Forex shortage. A BDC operator, Mr. Harrison Owoh, said there had been sustained fall in the sale of foreign currencies to BDCs for two weeks running.
Owoh attributed the shortage to the fall in inflow into the country. He said, “For two weeks running, BDCs have been getting $8,000 instead of 15,000 weekly dollar sale from Travelex.”
However, the Director General of Lagos Chambers of Commerce and Industry, Mr. Muda Yusuf, expressed his displeasure over the consistent slide of the Naira.
Yusuf who spoke in an exclusive interview with The Point said liquidity should be restored to forex market while the emphasis on demand management of the forex market should be reduced.
He said time has come for Nigeria to market its abounding opportunities to the global investment community for a broader view of the country, its resources and people.
He explained that although Nigeria is one of the several rapidly growing economies in Africa, international investors are still wary of the corruption and instabilities in the country. Development of the non-oil sectors, such as manufacturing and agriculture may help to alleviate Nigeria’s reliance on the oil industry and ensure sustainable economic growth that can attract investment.
The LCCI boss said basically to resuscitate the economy, there are certain things that need to be looked into, adding that the high cost of borrowing as represented in Treasury bill rate and the bonds is crowding the private sector in the financial market, affecting the growth of investment and financial intermediation.
According to him, the tight monetary policy in form of high cash reserve ratio (30 per cent), liquidity ratio(22 per cent) , monetary policy rate (12 per cent) has led to an increase in interest rate and better returns on investment in the money market.
“This is a disincentive to investment in the capital market. High interest rate is not good for firms in the real sector, many of which are listed on the Nigerian Stock Exchange (NSE). This has implications for Return on Investment (ROI) for those firms and by extension ROI on those equities,” Yusuf said.