Tuesday, May 26th 2020 11:09 PM

Market Digest Nigeria


Naira drops to N460/$1 at black market, might fall further

Naira traded at N460 to the U.S. dollar on the parallel market Thursday, having stayed at the same rate of exchange for two days without budging, a signal of the accumulation of unmet demand before central bank lifted embargo on forex sales a while ago.

Last week, the currency was quoted at N450 at the market following the relaxation of the coronavirus lockdown.

Reuters foresees naira to slide further on the black market as low dollar supply at the official market drive investors and exporters to resort to the parallel market.

The dollar needs of importers and investors have exploded as settlement obligations piled up amid forex shortage from oil crash.

Godwin Emefiele, the Central Bank of Nigeria’s chief, has cautioned local and foreign investors against currency dealing with parallel market traders, saying it was helping to overheat that market.

Traders expect naira to be rangebound on the official and over-the-counter spot markets in the week ahead.

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