Naira Slides to N446 on Expected Imports Jump
The Nigerian local currency, the naira, slides to N446 against the United States amidst an expectation that imports will rise. As the year runs to an end, analysts are predicting an increase in demand for dollars for imports.
Historically, strong demand for imports often occurs ahead of Christmas and new year celebrations. These imports are split between immediate consumption while companies will be planning materials imports for operations as well.
MarketForces Africa gathered from currencies traders and market analysts that the exchange rate at the investors’ and exporters’ FX window could worsen above N450 before the year-end.
While Broadstreet analysts are awaiting for the devaluation of the Nigerian local currency, a move that International Monetary Funds and the World Bank believe would drive foreign currencies inflow, the Central Bank of Nigeria has remained unfazed by the free falling.
However, forces of demand and supply in the Investors’ and Exporters’ FX market have continued to punish the naira. From N415 at the end of June, Naira has declined to N446, even without an official devaluation statement.
On Tuesday, the Naira was exchanged at N446 to the United States dollar at the Investors and Exporters window, a depreciation of 0.68 per cent, compared with the N443 it exchanged on Monday. READ: Bond Rate Slides as Financial System Liquidity Pressure Eased
The open indicative rate closed at N443.58 to the dollar on Tuesday. An exchange rate of N447 to the dollar was the highest rate recorded within the day’s trading before it settled at N446.
The Naira sold for as low as 424 to the dollar within the day’s trading. A total of US$ 51.58 million was traded at the official Investors and Exporters window on Tuesday. # Naira Slides to N446 on Expected Imports Jump