Nigerian Currency to Dollar Improved on the Parallel Market
The Nigerian Naira gained N5 against the US dollar on the parallel market on Thursday as demand wanes ahead of CBN FX sales.
The Central Bank of Nigeria had announced it would resume the sales of forex to the Bureau de Change operators across the country soon and discouraged hoarders and speculators from disrupting the forex market.
The announcement bolstered market outlook and strengthens the Nigerian Naira against the US dollar.
The Nigerian currency gained N5 on the parallel market to N450 against the US dollar, up from the N455 recorded on Wednesday.
Lack of forex liquidity has impacted the Naira value with speculators projecting that the local currency could trade as low as N570 against the American dollar in a few years.
This lack of confidence in the local market, especially after the COVID-19 eroded most of whatever was left hurt business perception and sentiment in Africa’s largest economy.
The Naira has continued to struggle since crude oil sales drop amid falling global demand for the commodity and plunged in foreign reserves used to back the currency.
However, with the central bank moves to stimulate the economy with about N3.5 trillion, reduced new interest rate of 12.5 percent and several other measures put in place to ease the negative impact of COVID-19 on the economy, the currency has started regaining its value.
