The naira rose further from 222 to 216 at the parallel market on Monday as Deposit Money Banks continued to reject cash deposits in dollars.
The Central Bank of Nigeria had said it supported the move by the banks, which was aimed at discouraging speculation on the local currency.
The latest rebound of the local currency has made the naira to strengthen by 4.1 per cent from 225 to the dollar on Friday.
It was quoted at 245 some weeks ago.
On the official interbank market, the naira traded at 199, very close to the central bank’s pegged rate of 197, Reuters reported.
The Acting President, Association of Bureaus de Change Operators, Alhaji Aminu Gwadabe, said, “Banks are rejecting dollar deposits … they are not able to transfer excess liquidity to their correspondent banks abroad, which is restricting importers from using domiciliary accounts.”
The naira had weakened at the parallel market to as much as 245 to the dollar on persistent dollar shortages some weeks ago.
The CBN had last month limited importers’ access to dollars on the official interbank market to buy a wide range of goods, in order to save its reserves.
After the restrictions, importers bought dollars on the unofficial market and deposited them in their bank accounts for transfers abroad, Gwadabe said.
But now banks are rejecting cash dollar deposits “due to large speculation on the currency,” the Chief Executive Officer, First City Monument Bank Limited, Mr. Ladi Balogun, said.
Lenders will continue to receive dollar transfers from other banks.
The restrictions have frustrated companies that need dollars for imports. The central bank has rejected the idea of loosening the curbs, saying it could not adopt an “indeterminate policy” of currency depreciation and that the naira was “appropriately priced” on the interbank market.
Gwadabe said there was excess liquidity of around $1bn on the parallel market.
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said if the trend continued, the naira might rise to as much as 200 against the dollar.
He believes the move by the banks is good as it helps to check the activities of speculators.
The Head, Investment and Research, Afrinvest West Africa, Mr. Ayodeji Ebo, said the trend would help the central bank to gauge the true value of the naira in the event of a possible devaluation in the near future.
“If there is a convergence between the interbank and parallel market, the CBN may possibly review its restrictions imposed on the forex market,” he added.
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