LAGOS: The Nigerian naira was quoted 18.3 percent weaker for portfolio investors on Tuesday compared with the interbank rate, a day after the central bank said it would allow investors to trade the currency at market determined rates.
The naira was quoted at 374.25 to the dollar on the central bank's new currency window, data on market regulator FMDQ OTC Securities Exchange showed. The naira was quoted at 305.95 on the interbank market and 385 on the black market.
The bank on Monday said it would allow investors to trade the naira at rates determined by the market, a move the regulator hopes will increase the amount of dollars available .
The stock market, which has languished as foreign investors fled, welcomed the new central bank window, gaining 0.2 percent in early trade on Tuesday after rising more than 2 percent at its previous session.
With the move, Nigeria now has at least six exchange rates: the new rate, the official rate, the black market, a rate for Muslim pilgrims going to Saudi Arabia, a retail rate set by licensed exchange bureaus and a rate for foreign travel and school fees.
Analysts say the policy has masked pressures on the naira as the central bank tries to avoid devaluing its official rate for the currency.
The central bank last year removed a temporary peg on the currency, but to protect its precariously low foreign reserves it introduced a convoluted exchange rate system that sees different buyers paying various rates for dollars.
It has been using the forward market to meet demand for dollars, making only tiny volumes available on the spot market and using those sales to influence the naira's official value.
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