Naira Plunges To N530 Against The Dollar, N720 Against The Pound

Nigeria’s legal tender on Thursday sunk to a new record low against the dollar, the British Pound Sterling and Euro amid the lingering scarcity of foreign exchange in Nigeria.

The naira declined against the dollar both at the parallel market and the Investors’ and Exporters’ foreign exchange window.

Nigeria's local currency fell to 530/$1 at the parallel market on Thursday from 528/$1 on Wednesday. It also dipped to N720 against the pound at the parallel market from N717/£1 on Wednesday, while the Euro rose to N620 from N616 on Wednesday.

At the I&E window, the naira weakened further to 411.67/$1 on Thursday from 411.50/$1 on Wednesday, according to FMDQ Group.

No less than 55 per cent to 60 per cent of Nigerian forex transactions are traded at this window, which is used by the CBN and most exporters and investors, according to Financial Derivatives Company Limited.

Investors and traders are now anticipating the upcoming Eurobond issuance – planned for September – as it is a potential trigger for much-awaited FX adjustment.

The Special Drawing Rights (SDR) allocation took place earlier this week, boosting reserves by the equivalent of USD3.3bn. The upcoming Eurobond issuance, likely to be around USD3-5bn, would potentially mean that a USD7bn reserve boost would be available to the CBN.