The Nigerian naira was quoted at N578.37 to $1 at the currency futures market on Wednesday, just off a record low of N584.11 recorded last week as dollar scarcity for businesses and individuals in genuine need continued to raise concerns.
Nigeria’s local currency has been hitting record lows on the parallel and otc spot markets since early March when Nigeria’s central bank adjusted the value of the naira by 15%.
Introduced about four months ago, the 5-year naira futures traded above the N550 to $1 last month at the derivatives market based on dollar scarcity recorded at the spot market.
Commercial bankers, however, stated that Nigeria’s central bank has been trying to improve the liquidity on the interbank market.
Last week Nigeria’s central bank withdrew around N460 billion from Nigeria’s banking system, banking sources told Reuters.
The bank has resumed dollar sales to local clients, selling around $100 million per week, but has yet to sell to foreign-based investors, traders say, after it scrapped a planned auction because of lockdown measures to slow the COVID-19 pandemic.
Local Importers were left scrambling for dollars while providers of foreign exchange, such as foreign investors have not returned back to the country.
“Liquidity on the over-the-counter spot market touched a low of around $31 million on Wednesday from around $300 million a day last year,” currency traders told Reuters.
The naira closed at 387.08 on the spot market, while the two-week currency futures trading at 389.84. The naira was quoted at 361 on the official market, backed by Nigeria’s central bank.
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