Nigerian naira depreciates 0.27% on the street as traders worry over thinning margins

Nigeria’s currency, the naira, Tuesday depreciated at the parallel market, losing 0.27 percent to N368 to the dollar from N367 it traded Monday, just as traders complain about thinning margins.

The naira closed flat against the Pound Sterling and the Euro to exchange at N476 and N432 respectively.

Baba Abana, a forex trader in Lagos told Businessamlive that the convergence of rates in the different trading platforms/windows is making many of his colleagues to be trading at a loss.

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However, analysts say street sellers are still making margins as high as N5 for every dollar sold. For example at Eko Hotels & Suites in Lagos Tuesday the local currency was sold at N368/$ while traders preferred to buy same for N363/$, thus making a huge margin.

Meanwhile, at the official market, the naira gained 0.02 percent to N305.65k, while it depreciated marginally by 0.62 percent to N362.50 at the Investors’ & Exporters’ FX Window from N363.25 it’s opened the trading same day.

The central bank has since April this year continued to intervene in the foreign exchange market following challenges arising from foreign exchange illiquidity on the back of a drastic reduction in oil earnings and speculative trading most especially at the parallel market.