Home Business Naira Faces Further Weakness Amid Dollar Shortage, Fitch Says

Naira Faces Further Weakness Amid Dollar Shortage, Fitch Says

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The naira was quoted at 1002 per dollar at the parallel market on Wednesday, according to Umar Salisu, a foreign-exchange operator who compiles the data in Lagos, the nation’s commercial hub. But it was 26% stronger at 745.19 naira/dollar in the official window, according to FMDQ, a Lagos-based platform where the currency is traded.

The naira has weakened sharply in street trading in the last two weeks as the central bank abstained from increasing supply of the greenback at the official window, where the currency rate has been very volatile. Naira non-deliverable contracts for three months time traded at a record 821.38 per dollar on Wednesday.

Newly appointed Nigerian central bank Governor Olayemi Cardoso, who lawmakers confirmed to the position last week, is yet to signal his policy preference.
The gap between the official and parallel market rates “highlights the challenges in sustaining exchange-rate liberalisation and raises the possibility of a further devaluation,” Fitch Ratings said in emailed statement.

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