Naira sinks to all-time low of 334.50/$1
The Naira weakened to an all-time low of 334.50 against the dollar on the interbank market on Wednesday, a day after the central bank hiked interest rates to try to lure foreign investors back into local assets, traders said.
According to Reuters, the naira fell 5.8 per cent on Wednesday from its opening rate, and $10 million was traded at the new record low.
Traders said investors were pushing the currency lower to test the limit of how far it can fall, given a spread of almost 12 per cent between the official and black market naira rates.
Although the local currency at the spot market berthed at N330.12 at the official closure of the interbank market, some traders speculated that there was extended trade which saw the naira closing at N334 to the dollar.
According to dealers, $10 million was traded at the new record low, even as investors were pushing the currency lower to test the limit of how far it can fall, given a spread of almost 12 percent between the official and black market naira rates.
The Nigerian currency opened at N377 and closed at N378 against the dollar by Wednesday afternoon, a rate it had maintained for two days running.
The naira weakened further against the Pound Sterling but retained its rate with the Euro as it exchanged for N492 and N413, from N490 and N413 it posted on Tuesday.
At the Bureau De Change (BDC) segment of the market, the naira closed at N375, N490 and N405 against the dollar, Pound Sterling and the Euro, respectively.
Dealers said the naira's performance against the dollar followed reports of pressure in foreign exchange supply, mainly at the interbank market segment, just as the local unit failed to lure in local investors, or foreign players as trade dried up a day after interest rate hike from the central bank.
Traders said there was slight stability in the exchange rate of Naira to Euro as the local unit recorded little or no changes to Monday's close of N340.504 to the Euro, and N406.875 to the British Pounds same. - Tribune.