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UPDATE 1-Nigerian naira eases 1.75% on spot market to 410.50 per dollar

Published 12/02/2021, 12:58
Updated 12/02/2021, 13:00
© Reuters.

(Adds details)
By Chijioke Ohuocha
ABUJA, Feb 12 (Reuters) - The Nigerian naira dropped 1.75%
on Friday to a record low of 410.50 per dollar on the spot
market, traders said, citing dollar scarcity and a lack of
central bank intervention on the market.
The naira, which has been weakening on the over-the-counter
spot and derivatives markets, dropped to a low of 403.29 naira
on Thursday after reaching record intra-day lows since January.
The International Monetary Fund on Monday urged the central
bank to reduce its interventions in the spot market and allow
for greater adjustment in the exchange rate to eliminate the
premium on the black market, where the naira trades more freely,
to prevent a backlog building up.
The central bank did not agree with the need for additional
exchange rate adjustment, blaming the global environment for the
current developments. It added that further exchange rate
depreciation would stoke rising inflation.
Nigeria adjusted the exchange rate last year, after an
official devaluation in March, in an attempt to align multiple
quoted currency rates. But the naira has continued to weaken
this year. The central bank told IMF that it was addressing the forex
backlog.
Traders said the central bank has yet to sell dollar to
foreign investors seeking to repatriate funds and importers with
past-due obligation have been scrambling for hard currency.

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