Market News

The naira weakened further on the official market on Fri- day closing at N1,339.23/$1 compared to N1309.88 per dollar on Thursday, data from FMDQ showed. This means that the local currency declined against the greenback for the sixth consecutive day on the official market, its longest weakening trend since its devaluation in January. Analysts attributed naira’s weakness in the last few days to low domestic dollar liquidity.

In a report on Wednesday, Bloomberg said that supply of dollars is proving to be insufficient to support the Central Bank of Nigeria’s (CBN) resolve to boost confidence in the naira, adding that volumes in the foreign-exchange market dropped to a two-month low of $86 million on Friday before recovering to $133 million on Tuesday.

It quoted Head of Africa strategy at Standard Chartered Bank, Samir Gadio, as having said that: “The naira has been supported by onshore dollar selling as long positions were unwound, but the rally was probably overextended.” According to him, a dislocation started to emerge as domestic market participants sold dollars at increasingly lower spot levels which was not sustainable and led to a correction. However, the naira strengthened on the parallel market on Friday, recovering from a six-day losing streak to trade at N1,400 per dollar compared to N1,450/$1 on the previous day.