Naira weakens to 532/dollar despite rising forex reserves

Naira weakens to 532/dollar despite rising forex reserves

Despite an increase in the country’s foreign exchange reserves, the Nigerian currency fell further versus the dollar on Monday in the parallel market.

The currency reserves have rebounded to their greatest level in more than three months after falling to a record low of $33.09 billion on July 12.

On Monday, the naira plummeted even lower to 532/$1 on the parallel market.

Since August 4, when it closed at 506/$1, the local currency has lost more than 5% of its value.

On the parallel market, the naira fell to 723 against the British pound sterling from 722/£1 on Friday, while the euro rose to N625 from N622.

At the I&E window, the naira, however, gained 0.09 per cent to close at 411.13/$1 on Monday, according to FMDQ Group.

The country’s external reserves, which have been risen consistently since August 25 after wobbling for several weeks, hit $34.26bn last Friday, highest since May 26, according to the CBN.

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The reserves gained $870m in the 10 days to September 3, the CBN data show.

The naira had strengthened to 506/$1 on August 4 after plunging to 525/$1 at the parallel market on July 28, a day after the Central Bank of Nigeria stopped foreign exchange sales to Bureaux de Change.

The CBN Governor, Mr Godwin Emefiele, had on July 27, at the end of the Monetary Policy Committee meeting, announced the stoppage of forex sale to the BDCs, saying they had turned themselves into “agents that facilitate graft and corrupt activities of people who seek illicit fund flow and money laundering in Nigeria.”

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