Naira Currently At The Lowest Ever Against Dollar, Now N183.05

The Nigerian naira touched a new record low
of 183.05 against the dollar today, Reuters
reports.
Dealers say concerns over a sustained low

oil price and expectations of foreign investors
would demand more dollars to pull out of
local assets.
The Naira was trading down 2.4 percent from
Friday’s closing level.
The Central Bank of Nigeria (CBN) has been
struggling to keep the naira within its
preferred band even after devaluing the
currency by 8 percent last Tuesday in a bid
to halt a decline in the foreign reserves of
the nation. Oil sales provide around 95
percent of those reserves.
The bank’s target band after devaluation is 5
percent plus or minus 168 to the dollar, but
doubts remain about whether it went far
enough given the likelihood of continuing low
oil prices and the fact that Nigeria’s oil
savings were being depleted even during a
period of record high crude prices.
The Central bank’s ability to maintain that
level will be put to test in the coming weeks
— the naira is reportedly trading well below it
and forex reserves are running out.
Pressure on the currency from lower oil
prices risks reigniting inflation, which has
stabilised in single digits for the past two
years, the first time it has been this low.
Last week, the exchange rate for dollar at
the Abuja black market,was between N182
and N186. It will be recalled that the
International Monetary Fund, IMF, last week
commended the CBN for its recent move to
devalue the naira, saying it was the “right
step in the right direction”

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