Nigeria's Naira Slides on Official Market on Plan to Align Exchange Rates

Proshare - Facebook Proshare - Twitter Proshare - Linked In Proshare - WhatsApp

Wednesday, June 17, 2020 / 04:59 PM / by Chijioke Ohuocha of Reuters / Header Image Credit: Premium Times NG


Nigeria's naira opened 6.2% lower against the U.S. dollar on the official market on Wednesday as traders quoted the currency close to the over-the-counter spot market rate on indications the government would move to conserve dwindling reserves.

Proshare Nigeria Pvt. Ltd.


In a finance ministry document seen by Reuters on Wednesday, the Minister of Finance Zainab Ahmed said the government would seek to unify the exchange rates to generate more naira from its foreign inflows and manage the rate in a sustainable manner.


It would also direct oil firms to sell dollars to the central bank as opposed to the state-owned petroleum corporation NNPC, Ahmed said, adding that the government would deregulate petroleum prices as part of measures to safeguard oil revenues.


The policies will be implemented over a 12 month period, the document said.


The naira traded at 385 per dollar on the official market, supported by the central bank on Wednesday, before recovering to 361, where it closed on Tuesday, data from Refinitiv Eikon showed.


The central bank did not immediately respond to a request for comment.


Nigeria, Africa's largest economy, has operated a multiple exchange rate regime used by the central bank to manage pressure on the naira. But dollar shortages have plagued the economy after the coronavirus-induced oil price crash slashed government revenues and weakened the local currency.


The currency has been hitting new lows on the black and over-the-counter spot markets since March after the central bank adjusted its official rate, implying a 15% devaluation.


The naira was quoted at 452 on the black market on Wednesday, while the longest five-year currency futures contract quoted it at 578.69.



The post Nigeria's Naira Slides on Official Market on Plan to Align Exchange Rates first appeared in Reuters on June 17, 2020


Proshare Nigeria Pvt. Ltd.

Related News

  1. FMDQ Exchange Set to Engage Market Stakeholders on Combating Currency Exchange Volatility
  2. Nigeria's Gross Official Reserves Recovered By US$3.07bn in May 2020 to US$36.60bn
  3. Manufacturing: FX Shortage Starting to Bite
  4. Nigeria Foreign Exchange - Naira: The Price of Nigeria's Oil Fortune
  5. Gross Official Reserves Declined By US$1.64bn In April 2020 to US$33.52bn
  6. Forex Repatriation: Emefiele Assures Investors of Investments Security
  7. Nigeria's Five-Year Naira Futures Slide Past 550 After CBN Weakens Contract
  8. A Short-term Respite for the FX Market
  9. IMF Loan to Support Dollar Liquidity in the Short Term
  10. CBN Resumes Dollar Sales For SMEs, School Fees
  11. Weaker Naira Looms as Nigerian Black-Market Rate Plunges
  12. Nigerian Naira Forwards Slump after Central Bank Adjusts Currency Rate

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
Related News