Naira slides further against the Dollar

By Owolabi Oluwasegun

The Nigerian naira has continued to slide down against the United States dollar as the exchange rate value dropped as against the 380 recorded at the close of business on Friday.

The naira has continued to hover around 375 and 380 points against the dollar.

The continuous slide of the naira has been attributed to the inadequate forex liquidity at the interbank market by economic and financial experts.

The hope of the Nigerian naira rising against the greenback is however bleak as analysts have predicted that the local currency will further weaken against the dollar as the week continues owing to the limited supply of dollar.

Foreign investors, due to the current economic situation in the country, have continued to stay on the sidelines until the naira recovers against the dollar.

Recall that following the new policy implemented by the Central Bank of Nigeria last week which ordered an increase in interest rate in a bid to lure foreign investors into the local market, the naira on Wednesday recorded an all time low of 334.50 to a dollar.

The naira which at the end of last week closed at 321.16 last Friday, further sliding down as compared to the previous Friday which it closed at 292.40 rose a few points against the dollar to close at 316.37 on Monday.

A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun said: “The market still lacks enough liquidity, we need to do more to boost liquidity. The current rate is a measure of the amount of dollar liquidity at the interbank market”.

Also on the current economic standing of the naira, the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said: “We are in a very challenging situation as a country and the CBN needs to do something urgently to stabilise the exchange rate at the interbank market.

“If the CBN fails to intervene, the naira may fall further against the dollar at the interbank market. If it does, the naira may appreciate to say about 310 to the dollar. But the point is that the market needs sustained intervention until there is a calm that will assure the foreign investors that things are now normal.”

Source: The Herald