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LequteMan
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The Nigerian Naira, driven by concerns over a sustained low oil price and expectations foreign investors would demand more dollars to pull out of local assets, touched a new record low of 183.05 against the dollar on Monday. Reuters reports.
Pressure on the currency from lower oil prices risks re-igniting inflation, which has stabilised in single digits for the past two years, the first time it has been this low.
The currency was trading down 2.4 per cent from Friday’s closing level.
The central bank has struggled to keep the naira within its preferred band even after devaluing the currency by 8 per cent last Tuesday in a bid to halt a decline in the foreign reserves of Africa’s biggest economy.
The bank’s target band after devaluation is 5 per cent plus or minus 168 to the dollar, but doubts remain about whether it went far enough given the likelihood of continuing low oil prices and the fact that Nigeria’s oil savings were being depleted even during a period of record high crude prices.
The coming weeks will test the bank’s ability to maintain that level – the naira is trading well below it and forex reserves are running out, reports Reuters.
#Naira #Dollar #Nigeria
Pressure on the currency from lower oil prices risks re-igniting inflation, which has stabilised in single digits for the past two years, the first time it has been this low.
The currency was trading down 2.4 per cent from Friday’s closing level.
The central bank has struggled to keep the naira within its preferred band even after devaluing the currency by 8 per cent last Tuesday in a bid to halt a decline in the foreign reserves of Africa’s biggest economy.
The bank’s target band after devaluation is 5 per cent plus or minus 168 to the dollar, but doubts remain about whether it went far enough given the likelihood of continuing low oil prices and the fact that Nigeria’s oil savings were being depleted even during a period of record high crude prices.
The coming weeks will test the bank’s ability to maintain that level – the naira is trading well below it and forex reserves are running out, reports Reuters.
#Naira #Dollar #Nigeria
