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HomeBusinessNigeria's naira weakens further to N770.38/$ at I&E, N757 at parallel market

Nigeria’s naira weakens further to N770.38/$ at I&E, N757 at parallel market

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By Samuel Bankole

Nigeria’s naira currency weakened further against the greenback on Monday to N770.38/$ at the investor and exporter (I&E) forex window, down from N663.04 it closed on Friday.

The local currency also depreciated against the dollar at the parallel market, where it was exchanged at N757 to a dollar compared with N759 to a dollar the previous trading day.

Traders said the naira has been falling against the US dollar in all two segments of the foreign exchange markets since the Central Bank of Nigeria (CBN) decided to abolish the multiple forex market.

They said that the reform of the forex market would initially lead to a depreciation of the naira until liquidity started sipping in to stabilize the market.

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“We see the exchange rate depreciating to around N800–850 at this initial stage before stabilizing at a moderate rate when demand starts falling and the market receives more foreign exchange,” a trader told Global Financial Digest.

A web of multiple exchange rates under the suspended CBN governor, Godwin Emefiele, had led to foreign currency shortages and made it difficult for investors to take out money from the country.

The removal of restrictions on the official market initially drove the naira to a record low of N750 to the dollar on the official market in early 2017, but the rate has continued to drop on both the official and parallel markets.

This was the first time since 2016 that the naira recorded a big fall on the official market before the central bank introduced a managed exchange rate in 2017.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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