The naira is set to
witness another round of decline against the dollar in the days ahead as expected
increase in dollar flows from Nigerians living abroad coming home for
holidays
fell short of expectations.
The local currency
closed at 490 to the dollar on Friday, from 495 against the dollar last Friday
at the parallel market, Reuters reported.
In the official
interbank window, the naira was quoted at 310.25 to the dollar on Thursday, but
it was expected to close at around 305.5, the same level it has traded at since
August.
“We see the naira
depreciating against the dollar by the time more businesses resume operations
next week after the festive season as dollar liquidity remains thin in the
market,” one currency dealer said.
Currency experts
have predicted the naira will weaken against the greenback as the New Year
approaches.
Specifically, they
said the naira might fall to 500/dollar this week.
The naira has been
under severe and continuous pressure as the scarcity of the US currency
continues to create ripples in the financial markets and economy.
A director at Union
Capital Markets, Mr. Egie Akpata, said it was really difficult to predict the
direction of the naira currently because part of the currency market had shut
down for the year.
“You can’t really
predict the market now because part of the market has shut down for the year.
Things will really take shape next week. Currently, it could swing anywhere,”
he said.
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