Market News
Naira Weakens Further To N1,581.65/$1 On Official Market - NEW TELEGRAPH
The naira extended its weakness on the official market on Wednesday, closing at N1,581.65/$1 compared to N1,576.66 per dollar on Tuesday, data from FMDQ shows.
According to forex traders, the local currency also weakened against the greenback yesterday, dropping to N1,620 per dollar compared to N1,550/$1 on Tuesday.
Analysts note that dollar sales totaling $122.7 million on July 10-11 to local currency dealers by the Central Bank of Nigeria (CBN) have not balanced domestic demand for the dollar.
In a report on Monday, Bloomberg quoted Carlo Morelli, senior portfolio manager at Azimut Investment SA, as having said that: “The CBN has been in the market selling $50 million from time to time, which is not enough.”
He reportedly blamed the thin domestic market on capital outflows and a lack of investor confidence in the currency, while giving the central bank credit for tightening monetary policy and tackling access naira liquidity.
“Restoring foreign exchange broad confidence is the last step and the huge volatility in May delayed the retur n to normalcy,” Morelli said. “Many foreign investors are still waiting for more evidence of stability before considering Nigeria investable,” Morelli added.
Since the beginning of the year, the naira has been the second-worst performing currency in the world tracked by Bloomberg after the Lebanese pound.
