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HomeTop NewsNigeria's naira weakens again at parallel market, down to N500/$, falls 0.16%...

Nigeria’s naira weakens again at parallel market, down to N500/$, falls 0.16% at NAFEX

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By Oludare Mayowa

The Nigerian naira climbed back to N500 per dollar on Monday from N498 a dollar it closed on the parallel market on Friday, traders said.

The local currency also weakened against the greenback on the NAFEX window, down 0.16 percent from the level it closed on Friday.

The naira was quoted at N411.67 to the dollar on the Investors and Exporters’ (I&E) window also known as NAFEX against the last close of N411 a dollar.

Most participants maintained bids between N396.45 and N413.67 per dollar at the main official window.

The naira had hit N505 per dollar on the parallel market last week before it gained 1.79 percent at the close of the market on Thursday to close at N493 a dollar, its biggest gain since the regulatory bank announced the adoption of NAFEX rate as its anchor rate.

However, traders said pressure returned to the market on Monday as dollar liquidity dropped and forex demands that could not be met at the official window were diverted into the market parallel market.

READ ALSO: Nigeria, 3 others may become regional COVID vaccine manufacturing hubs ~WTO

The International Monetary Fund (IMF) on Tuesday said that the CBN should unify its exchange rate windows and establishing a market-clearing exchange rate.

Also, the World Bank on Tuesday said “Even though the nominal IEFX rate has been depreciating, which has helped to alleviate inflationary pressures, it has not been doing so fast enough to equilibrate the FX market.

“When there is a divergence between the official/IEFX rate and the parallel FX rate, the parallel rate is the one most associated with food price dynamics.”

Dealers said the naira may eventually settle at N500 per dollar as dollar shortage at the official market persisted.

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