Social analyst and foreign exchange dealers have predicted yet another rise of the Nigeria’s currency (Naira) against the dollar on the parallel market this week.
They are of the opinion that the peaceful outcome of the presidential election and the hard stance of the President-elect, Muhammadu Buhari, against corruption and economic leakages had boosted investor confidence in the economy.
According to The Punch, the naira, which fell to a record high of 228 against the greenback before the election, rose to 210 on Friday.
However, the local currency traded within the 199-199.50 band on the official interbank market, where it has been stuck since February, after the Central Bank of Nigeria pegged the rate.
It was learnt that he Acting President, Association of Bureau de Change Operators of Nigeria, Alhaji Aminu Gwadabe, disclosed that he expected the local currency to rise further this week and beyond.
Gwadabe, who said the naira had firmed to 204 against the dollar on Thursday, believe the trend would continue this week, adding that “the naira may appreciate to something below 197 currently at the interbank market.”
Foreign exchange dealers said the demand for dollar had reduced compared to what happened before the presidential election.
Mr. Kunle Ezun, who is a currency analyst at Ecobank Nigeria, disclosed that the market was trading around the general elections and Buhari’s person.
He said, “The market has been trading around sentiments and emotions, this is why the naira is appreciating; nothing has really changed in the fundamentals. There was high demand for the dollar before the election because some people predicted post-election violence. Now, the game is over and there is no violence. So, the demand for the greenback is abating.
“The market is also trading around the sentiment that Buhari will fight corruption, strengthen institutions and eliminate wastages. But after his inauguration, the market will trade around the fundamentals like the oil price, external reserves and others.”