Nigeria’s naira touched a record low against the dollar in thin trading on the official market on Thursday, bringing it closer to the rate at which it trades on the parallel market.
The currency of Africa’s biggest economy NGN=D1 fell as low as 1,134 naira to the dollar, LSEG data showed, before recovering to trade firmer on the day around 798 to the dollar.
The naira’s official exchange rate has been drifting towards the parallel market level for the past two weeks, as the central bank is yet to clear outstanding foreign-currency amounts owed in forward deals.
Nigeria has nearly $7 billion in forex forwards that have matured and which corporates bought from local banks.
Nigeria’s new central bank governor Olayemi Cardoso has been silent on whether he will set a trading band for the naira, which his predecessors did, thereby allowing trades to be done at willing buyer, willing seller levels, somewhere close to the parallel market.
The naira sold for 1,160 to the dollar in street trading where it trades freely on Thursday. It opened for trade on Thursday at 1,051 naira per dollar on the official market.
Cardoso plans to outline his thrust for monetary policy and economic outlook on Friday, which will be closely watched by analysts and investors.
Source: Nasdaq
