Nigerian naira extends losses as speculators take position – Reuters

dollar to naira

LAGOS May 13 (Reuters) – Nigeria’s naira extended its losses against the greenback on Friday amid a jump in demand for dollars by oil importers and speculation of central bank moves to make the exchange rate more flexible, traders said.

The local currency slipped to 345 to the dollar on the parallel market in early trade, down 1.2 percent compared with the previous day’s closed.

“More speculators are taking a position in the market, causing dollar scarcity and fall in the value of the local currency,” said Aminu Gwadabe, head of the bureaux de change operators association.

On Wednesday, the Nigerian government said fuel importers were allowed from how on to get dollars from the parallel market to help ease acute shortages – likely to result in increased demand for dollars, and more pressure on the naira, as importers increased their orders.

On the official interbank market, the naira is quoted at 197.50 to the dollar, near the official peg rate of 197 to the dollar.

However, currency traders said they are hopeful the central bank will soon review its rigid exchange policy.

“Banks are already calling the central bank to get clarity on the next move concerning the naira exchange rate, our expectations is that the bank will over the next few days provide some form of clarification on the next step on the naira,” a senior banker who don’t want to be named told Reuters.

“Hopefully, we shall soon have a more flexible exchange rate in the next couple of days based on the pronouncement of the government in recent time,” a currency dealer said.

The central bank banned dollar sales to retail bureaux de change in January and reduced supply at its official interbank forex market in an effort to conserve reserves, now at their lowest level.