TRIBUNE
The currency took a downturn after its recent gains and wonderful performance last month, when it was ranked as one of the best-performing currencies globally as of April 2024.
According to the report, the reversal in Naria’s gains has placed increased pressure on the Central Bank of Nigeria (CBN) to continue raising interest rates.
Naria’s depreciation to 1,466.31 against the dollar was reported to be its weakest level since March 20.
The Bloomberg report released on Friday explained that the recent development is attributed to scarcity of USDollar in the local markets, with only $84 million available on Thursday, half of the previous day’s supply.
However, Tribune Online reports that the nation’s currency plummeted to as low as N1,600/$1 on the official market and N1800/$1 on the parallel market in March.
Razia Khan, the Chief Economist for Africa and the Middle East at Standard Chartered, who spoke with Bloomberg, estimated that $1.3 billion in naira futures will mature at the end of this month, potentially dampening market sentiment and expected to create more demands for dollars.
She said, “When the currency appreciated very fast, there had been a bout of profit-taking by offshore investors, and this meant that the dollar-naira exchange rate backed up again.
“This is completely in line with the functioning market.”
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