Economy
Naira sinks to 475 as demand for dollar rises
Amid a rise in demand for the dollar, the naira weakened further on Monday, trading at 475 to the United States dollar in the parallel market
The Naira, which has come under pressure in recent days, fell to 470 per dollar on Friday from 468 on Thursday. It was trading at 462-463 at the unofficial market at the start of this month.
In the Investors’ and Exporters’ forex window, the naira closed at 386 to a dollar on Monday, compared to 385.50 at which it opened, according to data from FMDQ Group.
The CBN has kept the official exchange rate at N379/$1 since August, when the naira was devalued for the second time this year from 360 per dollar. It was first devalued to 360 in March from 306.
The Group Managing Director/Chief Executive Officer, Cowry Asset Management Limited told journalists that “All the major sources of foreign exchange inflow to support the country’s forex reserves have declined,”
The forex reserves fell to $35.60bn as of November 13, 2020 from $35.69bn on October 28, the latest data from the Central Bank of Nigeria showed.
Johnson said while there had been some recovery in the price of crude oil, the decline in oil production caused by the OPEC cut deal meant that proceeds from crude sales had dropped.
The financial expert also said foreign portfolio investment in the country had plummeted, adding that diaspora remittances had also declined significantly.
“There is a lot of unmet demand for dollars,” Johnson said, adding that pressure was mounting even as the CBN continued to intervene in the market.
According to him, demand pressures were coming end-users and those whose obligations had matured and in need of forex to meet the obligations.
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