Naira to rise further as banks reject dollars
The United States dollar will further
tumble against the naira at the parallel market this week as Deposit
Money Banks continue to reject cash deposit of foreign currencies into
customers’ domiciliary accounts.
The naira had appreciated against the
dollar from 245 to 220 at the parallel market last week after banks
started denying their customers opportunity to make cash deposits of
dollar, pound and euro into their domiciliary accounts.
Foreign exchange dealers told our
correspondent on Sunday that the naira would likely appreciate further
against the dollar at the black market this week.
A forex trader, who chose to speak under
the condition of anonymity said, “We expect the naira to
appreciate
further this week at the parallel market.
“Banks
have flooded the market with dollars and other foreign currencies. This
is making the naira to appreciate. There is still a huge stock of
dollars out there that the banks will be pushing into the parallel
market this week.”
The Acting President, Association of
Bureau De Change Operators, Alhaji Aminu Gwadabe, also noted that large
amount of dollars in the market would make the naira to appreciate
further at the parallel market this week.
Banks had last week told customers that they would no longer collect cash deposits into domiciliary accounts.
Fidelity Bank Plc, in an email to
customers, said the policy came from the Central Bank of Nigeria and it
was only a temporary measure to curb speculative activities.
Guaranty Trust Bank Plc also told customers about the development in an email statement.
“Banks no longer accept dollar cash due
to large speculation on the currency,” the Chief Executive Officer,
First City Monument Bank, Mr. Ladi Balogun, told a conference call last
week
He said the lenders would continue to receive dollar transfers from other banks.
The Governor, Central Bank of Nigeria,
Godwin Emefiele, had two weeks ago said the naira was “appropriately
priced” at its current level of 197 to the dollar on the interbank
market.
The local currency has lost around 15
per cent against the dollar over the past year, with an official
devaluation in November and a de facto one in February.
The naira had weakened on the parallel
market, falling as low as 245, on persistent dollar shortages after the
central bank last month limited importers’ access to dollars in order to
save the external reserves.
Early last month, the central bank fixed
the spread at which bureaux de change operators could sell dollars to
individuals, and also limited the amount that bank customers would spend
using their debits cards abroad.
Although the restrictions have angered
investors and frustrated companies that need dollars for imports,
Emefiele has rejected the idea of loosening the curbs, saying the
central bank could not adopt an “indeterminate policy” of currency
depreciation.
Global ratings agency, Standards &
Poor’s, had also said Nigeria would have to devalue its currency at some
stage, possibly by more than 15 per cent, though it saw the adjustments
as likely to be gradual.
FCMB’s Balogun had also noted that the
parallel market was beginning to see a reversal in the naira’s weakness
as banks stopped taking dollar deposits.
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