Naira falls further against dollar at parallel market

The naira on Monday further depreciated against the dollar at the parallel market.

The local currency lost N1.50 to the dollar as it traded at N225.5 to the dollar at the parallel market on Monday afternoon.

This was against the N224 to the dollar recorded last Friday.

Meanwhile, the official interbank rate also dropped by 0.05 to N196.95 to the dollar.

Traders at the parallel market attributed the depreciation of the naira at the market to insufficient quantity of dollar at the market.

The Central Bank of Nigeria last week adjusted its exchange rate peg to N196.95/dollar from the N197 set since July, traders said, quoting a broadcast from the regulator.

This is the sixth adjustment since the central bank introduced tight controls on the foreign exchange market in February.

The Naira however appreciated on the parallel market on Wednesday prior to the independence day anniversary. It traded at N222 to the dollar, better than N224.50 a dollar on Tuesday.

The central bank injected $80 million into the bureau de change market, just as naira also closed firmer at the new rate of N196.50 to the dollar at the official interbank market compared with N197 per dollar rate the previous day.

Data for the month of September obtained from the apex bank's website show that there has been a fall in Nigeria's foreign reserves.

Foreign exchange reserves fell by 3.14 per cent to $30.48 billion by September 23 from $31.47 billion a month ago.

The reserves of Africa's top oil producer is now down 23.03 per cent from a year ago.

In August, the CBN indicated that foreign exchange reserves rose by $350 million to 31.43 billion. The reserves increase crossed $30 billion in July, rising by 5.6 per cent from 29.03 billion in June to N30.69 billion.

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