Babajide Komolafe
6 October 2003
The nation's currency, Naira, appreciated sharply by 200 kobo against the U.S dollar in the parallel market last week, as N142 exchanged for one dollar at the close of business on Friday, as against N144 the previous week.
This sharp fall in the exchange rate of the dollar, according to parallel market sources, was occasioned by a sudden increase in the supply of the U.S currency.
Manager, Standard BDC on broad street, Mr. Samuel Ibrahim disclosed to Vanguard that there was constant inflow of dollar into the market throughout the week, adding that the influx however amazes most market operators, as it was very sudden and quite unusual for the market to experience such at this time of the year.
It would be recalled that the exchange rate of the dollar in the parallel market has been on the upward trend especially since the eight-day strike action by the Nigeria Labour Congress (NLC) in July. Thus from N140 to the dollar, the exchange rate rose consistently till it reached N144 in the last week of September.
The persistent increase was attributed to rising demand for the US dollar. In fact, most market observers had predicted that the exchange rate of the dollar might further rise to N145 before the end of September.
Some market operators, however, believe that last week's development might not be sustained, as the influx of dollar is quite huge and too sudden, hence the sustainability of its effect is doubtful.
It is believed that the inflow might be from an organisation or group with a sudden receipt of dollars, or which for one reason or the other decided to off load a significant chunk of its stock of dollars in the parallel market.
Meanwhile, the exchange rates of the Naira to the pound sterling and Euro remained fairly stable throughout the week.
At the close of business on Friday, N228 exchanged for one pound sterling, while N160 exchanged for one Euro.
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