Dollar Set To Sell For 408 At Parallel Market

The US dollar has begun to sell at an average of N380 for a dollar in the parallel markets across the country, while experts suggested it would climb to N408.94 per dollar.

Traders contacted by THE WHISTLER said that the rate in Lagos, the economic hub of the country, had risen to N375 per dollar on Wednesday.

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Efforts to contact forex vendors in Abuja failed, however, a customer told the website that he sold his dollar for N374, while AbokiFX also estimated the selling rate as of Thursday 12 March, 2020 at N380 per dollar.

At the official rate, the Central Bank of Nigeria (CBN) has maintained a rate of N306.95 per dollar.

According to Afrinvest Research, “Finally, the 12-month forward rates suggest a currency value of N408.94/$ and using the long-term REER equilibrium of Nigeria, we forecast a similar 10.0%-15.0% adjustment.”

The current pressure on the Naira follows the fall in global oil price to $30 per barrel on Monday, after Russia and OPEC meeting to cut daily supply ended in a deadlock.

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The new price falls bellow the $57 per barrel oil benchmark for the 2020 budget.

The CBN makes weekly intervention of $210 million to support the Naira, however following the pressure on revenue due to fall in oil price and the country’s depleted reserves of $36.2 billion, the CBN was yet to intervene on the FX market.

Recall that THE WHISTLER had reported that the excess crude account (ECA) which would have supported the budget during periods of loss was left with $71.8 million, from $2.1 billion in 2015.

Afrinvest Research suggested that the devaluation of the currency would be the last measure to correct the external imbalance and support the economy.

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