The apex bank is fighting a subtle currency war it cannot win, some analysts who preferred not to be mentioned told MarketForces Africa. A Broadstreet finance expert Kingsley Aigbe had told MarketForces Africa that the CBN is only postponing the inevitable.
Market consensus remains that the local currency is relatively overvalued. Godwin Emefiele, CBN Governor has however remained unfazed by the weakening of the local currency amidst rising demand.
In the parallel market, the Nigerian naira exchange rate has also worsened, trading at N704 to the United States dollar – amidst strong speculative activities due to the widening difference between FX rate spreads.
Data from the FMDQ Exchange platform showed that the naira depreciated slightly against the dollar exchanging at N436.50 at the Investors and Exporters window. The figure represents a decrease of 0.04 per cent when compared with N436.33 to the dollar before the close of business on Sept. 9.
Market data shows that the open indicative rate closed at N434.40. Meanwhile, an exchange rate of N437 to the dollar was the highest rate recorded within the day’s trading before it settled at N436.50.
The Naira was exchanged for as low as N425 to the dollar within the day’s trading, according to market data. A total of 99.78 million dollars was traded at the official Investors and Exporters window on Monday.
#Naira Hits N436.50 at Investors Window as FX Scarcity Bites
Nigerian banks’ market valuations have dropped significantly, and it appears few of the players have been spared in selloffs in the local bourse. Few gains were driven by small-cap banks in the tier-2 category.