The naira rose by 50 per cent yesterday against the dollar at the parallel market to N250 from N400, which it traded on Monday.
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The naira had been on a free fall in the last two weeks, peaking at 391 against the greenback at the parallel market last Thursday. The local currency, however, began a gradual recovery on Friday.
LEADERSHIP’s investigation reveals that Bureau de Change (BDC) operators as well as street hawkers in Abuja sold the dollar between N250 and N255.
A bureau de change operator, who simply identified himself as Ibrahim, said that he was very confused as the Naira continued to gain strength.
He said: “Earlier this morning, I bought dollars for N305, but now it is sold at N250, making me to lose N55 in less than 10 hours. I am very scared of buying dollars because of the continued instability.
“Although I am happy that the naira continued to gain strength at the parallel market as an overflow of dollars chased the local currency but we are losing greatly here.”
Forex dealers said the local currency was set to gain further momentum in coming days, arguing that most traders were rushing to reduce the amount of dollars in their holdings.
Currency strategist and experts have also stated that the depreciation the naira had recorded in the last two weeks was mainly artificial, arguing that it was part of the activities of currency speculators to force the Central Bank of Nigeria and the Presidency to devalue the naira.
They are of the view that naira will recover because of two things: the Presidency’s hard stance on not devaluing the naira and the decision of the Bureau De Change operators to peg their profit margin at 3.5 per cent.
President Muhammadu Buhari had on Saturday again rejected the idea of devaluing the naira, despite a hammering of the currency on the secondary market last week.
The president, who spoke at the presidential panel roundtable on Investment and Growth Opportunities in Sharm El-Sheikh, Egypt, said he rejected pressure to devalue the naira because Nigeria did not have the competitive advantage to benefit from devaluation.
The Central Bank of Nigeria (CBN) had, contrary to the expectations of the international community and analyst, refused to devalue the local currency, choosing rather to reduce the rate of foreign exchange outflow from the reserves.
An economist and currency expert at BestWorth Holdings, David James, said the naira would continue its rise to a point where the true value of the local currency could be found against the dollar.