Traders expect naira to remain steady amid Forex scarcity – TV360

The naira is likely to trade little changed at the official market, traders are speculating.

This comes even as the central bank struggles to support the local currency by injecting dollars into the official market daily.

The naira has consistently closed at 305 to the dollar on the interbank market in the week to Thursday on support from the central bank’s daily intervention.

It has been broadly flat at 425 to the dollar on the parallel market, compared with 423 a dollar last week.

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 after the central bank lifted the suspension of eight banks banned from the interbank currency market for failing to remit money owed to the government.

The CBN also approved the licensing of 11 new international money transfer operators, to address the Dollar supply.

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.