By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)- The naira on Friday traded 197/$1 on the interbank market compared to 199/$1 on Thursday, according to the Central Bank of Nigeria (CBN).
The CBN had on Wednesday announced the scrapping of its biweekly currency auctions and said it would sell dollars only at N198 revealing an actual devaluation of the currency.
Following the initial devaluation of Nigeria’s local currency by eight (8) percent in November last year, declining world oil prices and the resultant fall in the country’s foreign exchange earnings, the CBN closed the rDAS window and restricted dollar sales to only genuine and legitimate demands.
The retail/wholesale Dutch Auction Systems, rDAS and wDAS are official trading windows for the sale of foreign exchange to end users.
The naira recorded a new low as it traded at 221.8/$1 today in the parallel market (black market); depreciating its value in the face of several measures put in place by the apex bank to save the nation’s currency.
On Friday, the Brent crude oil dropped toward $60 a barrel as oversupply, underlined by record-high U.S. crude stocks, weighed on the market, a Reuters report affirmed.
According to a Proshare report, despite the dollar, pounds and euro persistent scarcity, the situation has been compounded by hoarding of these currencies by BDC operators with believe that the rates will go further up.
