A man counts Nigerian Naira notes at a market in Yola, Nigeria on February 22, 2023. Reuters/Esa Alexander/File Photo Get licensing rights
ABUJA, Nov 16 (Reuters) – Nigeria’s naira fell to a record low against the dollar in modest trading at the official market on Thursday, pushing the official exchange rate closer to the parallel market rate.
The currency of Africa’s largest economy fell to 1,105 naira per dollar from 830 at Wednesday’s close, before it traded firmer around 800 against the dollar, LSEG data showed.
A central bank spokesman did not respond to a request for comment on the naira’s decline or its plans for the currency when contacted by Reuters.
Traders said the official exchange rate of the Naira has been moving towards parallel market levels for the past two weeks.
The naira was quoted at 1,135 naira against the dollar in the parallel market on Thursday, while lenders were quoting the currency within a range of about 750 naira to 990 naira in the official market before Thursday’s trade.
FX market analyst Kyle Chapman said, “We suspect this is an unusual rate due to a lack of liquidity due to increased demand in the I&E window (official market), and we do not expect it to reflect the actual market rate in the future. Will do.” at Ballinger & Co., London
Central bank governor Olayemi Cardoso, who took office in September, has been silent about where he wants to see trading bands for the naira or when more liquidity might be injected into the market.
Traders said the central bank has not intervened in the official market since October, which has helped accelerate the naira’s decline.
The naira recovered from a record low of 1,300 on the parallel market last week after the central bank sold dollars to 14 lenders to meet outstanding currency payments. Some other lenders have still not received the settlement.
The government has said it expects foreign exchange inflows of $10 billion which will improve liquidity in the market, but it is not clear when these funds will arrive.
Additional reporting by Camillus Eboh in Abuja, editing by Alexander Winning and Mark Potter
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