Naira Exchange at N462 Against  US Dollar on the Black Market

Naira resumed its bearish trend against the United States dollar during the weekend on the black market.

The local currency declined by N1 from the N461 it exchanged against the US dollar during the week to N462 during the weekend, its lowest exchange rate in almost two years.

This decline continues against the British Pound as the Naira depreciated by N2 from N560 it traded during the week to N562 during the weekend.

Against the Euro single currency, the Nigerian Naira remained unchanged at N502 it exchanged during the week.

On the Investors and Exporters Forex Window, the local currency was flat. Trading at N386 against the greenback, the same rate it exchanged on Thursday.

However, the total volume traded on the window declined by 48 percent from $204.90 million traded on Thursday to $105.05 million on Friday.

Market uncertainties continue to dictate Naira’s exchange rate as traders remained wary of eventualities following news that the Central Bank of Nigeria is working on a plan to unify the nation’s foreign exchange rate.

Also, the weak foreign reserves and low foreign exchange generation amid falling oil prices and rising forex demand from investors looking to move their funds out of the country are the main factors weighing on the Naira outlook.

Last week, Moody’s Investors Service said “Lower dollar inflows at a time when foreign currency borrowing will likely be more expensive for Nigerian banks will strain their foreign currency funding, despite substantial improvements compared to 2016.”

“Our moderate scenario where foreign-currency deposits decline by 20%, while loans remain constant, would increase rated banks’ funding gap to NGN1.5 trillion [$3.8 billion], and to NGN1.9 trillion [$5.0 billion] under our severe-case scenario of 35% foreign-currency deposit contraction, creating acute funding challenges.”