The naira’s momentum continued on Wednesday against the US dollar at the parallel market to 300 from 310 on Tuesday.
The naira closed at 391 against the dollar last Thursday, but gained ground and rose to 375 and 310 on Monday and Tuesday, respectively.
While linking the recent gain recorded by the naira to significant supplies of forex to the market, forex dealers said the losses recorded by the local currency in recent weeks were “artificial and fuelled by the activities of currency speculators.”
However, foreign exchange dealers in the market believed the naira gained marginally on Wednesday, compared to what it gained on Tuesday, largely because forex supplies to the market were drying out gradually. They were of the opinion that the local currency might not record any significant gain in the coming days.
However, other forex dealers said the naira might gain further and settle around 260 against the greenback at the parallel market. As the dollar supply in the market is minimizing, the naira may gain further significantly before reaching equilibrium.
The Naira began its recovery shortly after President Muhammadu Buhari had reiterated its stance against the devaluation of Nigeria’s local currency on Saturday.
Financial experts maintained that the positives recorded by the naira might not be sustainable in the long run, because as demand continued to rise at the parallel market the local currency might plunge further.
Africa’s largest oil exporter, Nigeria, has been battered severely by the downturn in global oil prices.
