Tuesday, 2 August 2016

Naira drops against dollar



The naira has dropped again against the dollar on Monday . Its now 382 from 380 Friday.

Last week, it was between  375 and 380.Since the dollar scarcity, the naira has been under immense pressure at both the parallel and interbank forex markets.

Analysts predicted that the naira will weaken further against the dollar owing to limited dolar suplly as foreign portfolio investors continue to stay on the sidelines until the Nigerian economy showed signs of recovering from the impact of the currency tool.

Meanwhile a currency analyst at Eco bank believes that the market will improve in the coming months and boost liquidity.Chukwu on the other hand believes the CBN might have to intervene urgently to stabilize the market at the inter-bank market.

According to Punch a research analyst at FXTM, Mr. Lukman Otunuga, noted that the elevated concerns over a potential technical recession in Nigeria had forced the CBN to relinquish its naira peg.“With the parallel and official markets potentially closing the gap as the naira floats, liquidity could increase as investors send their dollars to the official exchange. As of now, the naira could depreciate further as a combination of rising US Fed rate hike expectations and ongoing fears over the domestic economy encourage investors to install another round of selling,” he said.

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