Naira expected to remain stable as demand for dollar slows – TV360Nigeria

Nigeria’s currency, the naira is expected to remain stable around the present level at both official interbank and parallel markets.

This comes as demand from holiday makers slow and the Central Bank of Nigeria ups its support for the local currency at the official window.

The naira on Thursday firmed a little at the parallel market to 423 a dollar from 425 to the dollar last week.

While it was quoted at 315 a dollar on the official window at 11:17 GMT.

“We don’t expect any major depreciation of the naira in the near term as most summer holiday makers are back and demand for the dollar slow a little,” Aminu Gwadabe president of association of bureau de change operators said.

The naira has been under a persistent pressure as dollar scarcity continues to weigh on the local currency at both the parallel and interbank forex markets.

However, traders say dollar supply had improved.

Nigeria was 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.

The naira first touched 400 on the black market last month.

The central bank has been selling dollars almost daily to boost liquidity and support the naira.

Nigeria, in June, 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.

But the lack of dollar liquidity has curbed interbank activity, leaving the central bank as the main supplier of dollars.

Currency traders have continued to wait for offshore flows to return.