The naira advanced by 9.14 per cent to close last week at N318 to the dollar from N350/$ at the Bureau de Change segment while the local currency appreciated by 9.86 per cent at the parallel market to N320/$ (from N355/$) as at Thursday, March 4.
Although the local currency was quoted at N310 to the dollar by mid-day on Friday,it closed at the above rate, even as the naira oscillated between N330 and N310 to the dollar within the week to Friday.
The unsteady exchange rate last week however, remained firmer than the N350 to the dollar last week at the parallel market.
The CBN clearing rate and interbank rate remained stable at N197/$ and N199.10/$ respectively.
“We have seen some resistance on the part of buyers not willing to pay more for the dollar,” one dealer said.
Traders said that the dollar supply remains tight but markets will continue to trade within the prevailing band as long as buyers are not willing to pay more for the available dollars.
Meanwhile the apex bank announced that about $20billion are held privately in bank accounts as speculators bet against the Naira.
“This week,we expect relative stability of the US dollar/ naira pair as speculators continue to unwind their position,” dealers at Cowry Assets Management Limited said.
The central bank intervenes once a week in the official interbank foreign exchange market to provide dollars for eligible importers, while it requires commercial lenders to fund its naira account 48 hours ahead of the intervention.
Similarly, President Muhammadu Buhari has rejected calls by the International Monetary Fund (IMF) to lift the foreign exchange curbs and allow a more flexible rate for the country’s currency.
“No,” he told pan-Arab Al Jazeera television in an interview posted on the station’s website, when asked whether he would consider ending the fixed naira rate to the dollar and devalue the currency.
He said hard currency curbs were necessary as Africa’s top oil producer could no longer afford to import as much as it had in the past due to dwindling oil revenues.
Last month, the IMF called on Nigeria to lift the curbs imposed by the central bank last year and let the naira reflect “market forces” more closely, as the restrictions had significantly affected the private sector.
The naira trades versus the dollar on the secondary market some 40 per cent below the official rate as the central bank has limited access to hard currency to preserve its falling currency reserves.