Rand Merchant Bank, the international think tank, is not reading too much into the improvement of the Naira against the United States currency.
The financial firm argued the Naira’s closing rate of 310,5 to the US dollar masked its rapid intra-day ascent to 350 on Tuesday.
A single trade of $100 000 was recorded in a day, marked by exceptionally thin trade, pulling the local unit back to the 310 level.
RMB said a sustained divergence between the official and parallel Naira rates had forced the Central Bank of Nigeria to set severe limits on the amount of US dollars that are bought and sold by bureau de change operators (BDCs) and regulate the margins on transactions.
“Though accessibility to US dollars has improved since the adoption of a flexible exchange rate framework in June, the availability thereof remains scant,” RMB projected.
The financial house argued in the absence of greater export earnings and investment flows, the Naira remained vulnerable to extreme volatility.
