Nigeria’s naira traded weaker on the official market than the black market on Thursday, with the official I&E rate falling to 812 to a dollar, according to Reuters data.
Black market traders told Pluboard the currency sold between 805 and 810 to a dollar the same day. Last month, the naira fell to a low of 840 on the official market.
– Key details behind the news
Shortage of dollars and high demand have sent the currency down in the last few days from the band it traded for more two weeks.
The Central Bank of Nigeria has intervened to prevent the naira from falling more rapidly a month after the government eased controls for the currency to trade more freely. The bank had said it maintains a “managed float”, implying it can step in if necessary to stabilize the market.
The naira has fallen over 40% since the central bank in June removed restrictions in a bid to unify the exchange rates and boost foreign investment. In the last two weeks, it has traded between 750 and 790 per dollar at the official Investors and Exporters (I&E) window.
Some traders said dollar sales by the CBN so far have been too modest to say that the exchange rate control has returned.
“The market expects the Central Bank of Nigeria to intervene more than once this week given the size of intervention yesterday and the current demand across the market,” Rand Merchant Bank analysts wrote in a note.
On Thursday, traders said the naira, Kenya’s shilling, and Zambia’s kwacha are expected to weaken further in the next week to Thursday, according to Reuters.
Reuters said exporters who are the main dollar suppliers in Nigeria at the moment are trying to drive the exchange rate further down.
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