UPDATE 2-Nigeria naira futures hit record low for five-year settlement

© Reuters.

(Adds derivatives market)
By Chijioke Ohuocha
ABUJA, Dec 31 (Reuters) - Nigeria's naira fell to a record
low on the futures market for the five-year settlement and
weakened sharply against the dollar on the spot market, traders
said, on Thursday, its last trading session for 2020.
The central bank weakened the currency on the derivatives
market, traders said, after the naira eased 4.2% on the
over-the-counter spot market, widely quoted by foreign investors
and exporters. It also eased on the forwards market.
Africa's biggest economy is facing its worst recession in
40-years brought on by an oil price crash, which has hammered
its currency, created large financing needs and caused chronic
dollar shortages, frustrating businesses and individuals.
The naira was quoted at 470 on the black market, where it
trades more freely, at a premium of 19% to the bank's official
rate of 381 set in July. It hit 608.10 naira to the dollar for
the five-year settlement on the futures market.
The central bank has been selling forex on the spot and
forward markets, but it has not been enough to meet rising
dollar demand from importers and foreign investors exiting
Nigerian assets.
The spot market was still seeking bids for dollars at the
close, traders said. A few trades were recorded between banks,
they said.
The bank has come under pressure from the World Bank and the
IMF to allow the naira NGN= to float so that it can adjust to
shocks from lower oil prices and remedy its balance of payments
problem.