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HomeTop NewsNigeria's naira appreciates at parallel, falls at NAFEX

Nigeria’s naira appreciates at parallel, falls at NAFEX

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The Nigerian naira appreciated at the parallel market on Wednesday, closing at N502 to the dollar compared with N505 a dollar it closed on Tuesday.

The naira, however, depreciated further by 0.06 percent at the NAFEX as the dollar was quoted at N412.00 as against the last close of N411.75.

Dealers said most participants maintained bids between N394.00 and N420.97 per dollar.

The naira had fallen against the dollar on the parallel market to N505 on Tuesday, touching four years low as speculators and hoarders took advantage of dollar shortage in the market.

Nigeria has devalued its currency thrice since March last year as lower oil income, which accounts for about 90 percent of dollar earnings put pressure on external reserves.

Some people are switching their naira savings into dollars fearing further devaluation.

Goldman Sachs Group Inc. forecasts the naira could weaken to between N440 to N460 a dollar in the short term.

READ ALSO: Seven people die in Petrol tanker explosion in Ogun State

Last week, the Central bank Governor Godwin Emefiele met with chief executives of commercial lenders at the Bankers Committee meeting.

The lenders agreed to increase dollar supply and operate special accounts to meet the requirements of business and travelers, according to Osita Nwanisobi, spokesman for the central bank.

The central bank aims to use lenders to make more foreign currency available to buyers, at around the official rate of between N410 naira to N412 naira to the dollar to reduce pressure on the parallel market where rates are crashing from excess demand.

However, traders said the naira will continue to slide as long as there are shortage of dollars while interest rate lower than interest rate.

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