Dollar rain eases pressure on naira in Forex market

Nigeria’s central bank sold an undisclosed amount of dollars, close to the end of market session, to help prop up the naira.

The currency market also registered 327 million dollars worth of trades on Monday, about six times more than its usual volume,

That included a single 270 million dollars transaction at 345 naira per dollar, by foreign investors buying local currency bonds,

The currency closed at 305 on Monday.

Nigeria is also Africa’s largest economy and its top oil producer, but its public finances have suffered as the price of crude oil dropped around the world.

In June, the country ditched its 16-month-old peg of 197 naira to the dollar to lure back foreign investors who fled both the equities and bond markets in the wake of the plunge in crude prices.

Investors have welcomed the removal of currency controls but many are still steering clear until Africa’s biggest economy shows signs of a concrete recovery.

CBN has also been mopping up naira liquidity to shore up debt yields.

Economic and financial experts said inadequate forex liquidity at the interbank market was taking a toll on the parallel market.

The economic crisis has also worsened due to attacks on the country’s pipelines by a militant group known as the Niger Delta Avengers.

Source: News Express.


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