Businesses hopeful as Naira extends gains at forex market

Some business persons in Lagos on Thursday expressed hope that the economy would soon rebound as the Nigerian currency continues to appreciate in all the major segments of the forex market.

In separate interviews with the News Agency of Nigeria in Lagos, they called on their fellow business persons to exercise patience and act to salvage the naira.

Uche Mba, a motorcycle spare-parts dealer noted that the appreciation of the naira at the forex market was gradually breeding calm in the economy.

According to him, the development will sooner than later lead to price stability of goods and services.

Obi Edwards, an importer of gas cylinders said that the liquidity challenge in sourcing forex was already reducing as most Bureau De Change (BDC) operators were selling forex.

Mr. Edwards expressed the hope that if the situation continued unabated, it would reduce the fluctuation in the prices of goods and services.

Stella Shogunle, a dealer in female handbags, said that it was good news that the naira had continued to appreciate at the forex market for about three weeks.

She called for patriotism from all Nigerians to ensure that currency speculators do not thwart the wind of progress in the forex market.

The naira on Thursday continued to hedge against the dollar in all the major segments of the forex market.

At the parallel market, the naira closed at N460 to the dollar, from N468 it posted on Wednesday, while the Pound Sterling and the Euro traded at N560 and N510 respectively.

About 1700 BDCs in Lagos and Abuja sold dollar at N380 controlled rate, while the Pound Sterling and the Euro exchanged at N558 and 500, respectively.

The naira closed at N304.50 at the official interbank market, maintaining same rate as at Wednesday.

Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON) called on all genuine forex buyers to purchase it from its members at the official price.

Mr. Gwadabe called on currency hoarders to sell the forex at their disposal as the naira was steadily on its way to full recovery.

SOURCE: Premiumtimesng

IMF welcomes Nigeria's decision to end currency peg

WASHINGTON (Reuters) - The International Monetary Fund said on Thursday it welcomed the decision by Nigeria's central bank to abandon its currency peg and adopt a flexible exchange rate policy, saying this was important to reduce fiscal and external imbalances.

IMF spokesman Gerry Rice told a weekly news briefing the Fund wanted to see how effectively the naira exchange market functions once the new float system is put into effect next Monday.

Nigeria's central bank governor said in a letter to President Muhammadu Buhari the bank expects the naira to settle at around 250 to the dollar after it abandons the peg of 197 to the dollar it has supported for 16 months.

"I think the announcement yesterday to revise the guidelines for the operation of the Nigerian interbank foreign exchange market is an important and welcome step," Rice told reporters. "It will provide greater flexibility in that market, the foreign exchange market."

Senior IMF officials, including Managing Director Christine Lagarde, have urged Nigerian officials to allow the naira to fall to absorb some of the shock to the economy from a plunge in oil prices and revenues. OPEC member Nigeria is a major oil producer. IMF officials have said that Nigeria has not requested IMF financial assistance, but has been in consultation with the Fund on dealing with budget shortfalls.

"As we have said before, a significant macroeconomic adjustment that Nigeria urgently needs to eliminate existing imbalances and support the competitiveness of the economy is best achieved through a credible package of policies involving fiscal discipline, monetary tightening, a flexible exchange rate regime and structural reform," Rice said. "Allowing the exchange rate to better reflect market forces is an integral part of that."