The Naira on Tuesday depreciated against the United States Dollar closing at N310.50, twenty-four days after the Apex bank removed the currency peg.
The Naira slipped by 2.5 per cent to a new closing low at N310.50 against the United State Dollar on Tuesday, July 26,almost a month after the Central Bank of Nigeria, CBN, removed the currency peg.
As a result of the crash, the nation’s local currency failed to lure in local investors or foreign players as trade dried up a day before an expected interest rate hike from the apex bank.
The naira had opened the day’s trading at N309 to the U.S Dollar and closed at N310 with a difference of N28.50 to Monday, July 25 trading rate at the inter bank market, according to data from Bloomberg news.
Having dropped to N307.98 last week, the currency opened at N302.10 yesterday and traded a total of just $8.64 million by the close, far less than $100.54 million on Friday, when the CBN spurred the market by selling some of its dollars.
Last Thursday, the naira fell through N300 per dollar, a month after the apex bank lifted its controls on the currency, and hit an all-time intraday low of N331 on Friday before recovering ground by the close.
CBN had on Friday settled $697 million of one-month outright currency forwards it sold in June which was part of $4 billion auctioned after the naira was floated last month to help clear a backlog of demand for dollars, at an exchange rate of N280 naira per dollar.
Outstanding forwards sold by the central bank also include $1.22 billion of two-month contracts and $1.57 billion due in three months. In non-deliverable forward markets, the one-month naira-dollar forward was quoted at N328 while the one-year contract fell as low as N368 per dollar.
