Naira traded at a record low of 860 per dollar on the black market on Thursday, according to traders, weakening below its official rate a month after the country devalued the currency and ahead of a central bank policy meeting next week.
The bank last month allowed the naira to weaken by more than
a third in a bid to unify Nigeria's multiple exchange rates and to lure foreign
investment to shore up liquidity in an economy struggling with dollar
shortages.
Last month's devaluation helped narrow the gap between the
naira's exchange rates on the official window and the black market but pressure
is gradually building up especially from individuals paying for expenses
abroad.
The naira has been swinging widely on the official market
since the devaluation. It touched a new low of 853 naira per dollar on
Wednesday, according to OTC market regulator, FMDQ Exchange.
The currency closed at 742 naira against the dollar on the
official market on Thursday, Refinitiv data showed.
Dollar shortages on the official market have seen customers
turning to the black market, helping to widen the gap between the spot rate and
the black market, one trader said.
Nigeria has embarked on its boldest reform agenda in
decades, including the removal of a popular but costly petrol subsidy and the
loosening of restrictions on foreign exchange trading, a gamble President Bola
Tinubu hopes will boost sluggish economic growth.
Analysts have warned that a weaker currency and the fuel
subsidy removal would likely to push inflation higher in the short term.
The central bank will meet on Monday and Tuesday to set interest rates with investors looking for measures to support the currency.
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