Naira Depreciates Further To N1,235/$1 In Parallel Market

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The Naira suffered further depreciation to a record low of N1,235 per dollar yesterday, following strong demand on the parallel market, also known as black

This represents a 2.06 per cent weaker value than the N1,210 recorded on Monday, when Naira had strengthened against the dollar, gaining 1.85 per cent at the Nigerian Autonomous Foreign Exchange Market .

Analysts say they expect Nigeria’s currency to stabilise in the short-term if the expected $10 billion flows through the economy.Charlie Robertson, head of Macro Strategy, FIM Partners UK Ltd, said $10bn should help but still the interest rate differential with $ bonds will weigh against the naira. If domestic and foreign investors make similar amounts in $ as naira, most will choose foreign exchange.

“This will help to stabilise the value of the Naira. However, as more FX is required by both government, businesses and households for various transactions, there is the need for the country to continue to generate foreign exchange earnings through export of goods and services so that it can avoid another round of excess demand of dollar over supply,” he said.

Sulaiman said these measures could bring much-needed order and discipline to a market that had been described as “a jungle” due to its lack of clear rules and accountability.

 

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