Naira hits record low of 412 to dollar on black market

Nigeria’s naira was quoted at an all-time low of 412 per dollar on the parallel market on Friday.

This comes after the suspension of some banks from forex trading leading to dollar shortages.

Traders said some bureaux de change operators have been finding it difficult to access their forex account and get dollar supply.

The central bank suspended nine commercial banks from forex transactions on Tuesday for failing to pay money owed to the government– although one was readmitted after making a payment.

This has put further pressure on the local currency.

On Thursday the naira closed at 409 per dollar on the parallel market. On the interbank market it traded at 315 compared with 305 the previous day.

Shares in some of the banks hit dropped by up to 7.8 percent.

Bank executives have been meeting central bank officials to resolve the forex issue as investors continued to dump their shares second day.

On the interbank market, the currency gained 0.2 percent to close at 305 naira to the greenback with traders attributing the rise to central bank dollar sale to prop up the unit. The bank has been selling dollars almost daily to boost liquidity.

However, currency forwards put the naira at 344.50 to the dollar in one months’ time.

On Thursday, the central bank settled $152.48 million of naira futures contracts it sold in June at an exchange rate of 279 naira per dollar, further draining its reserves, which is at its lowest in more than 11-years.

In June, the central bank abandoned its currency peg to the dollar, allowing the naira to weaken by 40 percent in a bid to attract more foreign investment.

But so far trading in the official foreign exchange market has been limited as those with dollars prefer to sell them for a higher rate on the black market. (TV360 Nigeria)


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