The naira yesterday continued its free fall against the dollar, as uncertainty grips the foreign exchange market over the delay by the Central Bank of Nigeria (CBN) in coming up with clear framework on how the new flexible FX policy would be implemented.
Consequently, naira yesterday depreciated in value against the dollar by N5 or 1.4 percent each at the autonomous and parallel markets.
After trading yesterday, naira/dollar exchange rate closed at N360/$ compared with N355/$ at the parallel and autonomous markets, respectively.
The local currency remained steady against the dollar in the interbank (1.0% YTD) on Monday. It closed at $1:N198.940. The naira outlook remains uncertain and will continue to be affected by sustained low oil prices, low-level Reserves and strong import demand, according to Kunle Ezun of treasury research, Ecobank Nigeria Limited.
The central bank has said it would abandon its naira peg to the dollar and introduce a flexible currency regime. It has not said how this would work, though, which has unsettled investors worried about getting caught in the middle of a devaluation.
Demand for dollar increased the more as currency dealers held the greenback while trying to hedge against any eventual depreciation by the apex bank.
However, Nigeria plans to raise N105 billion ($527.6m) in local currency-denominated bonds with maturities of five to 20 years on June 15, the Debt Management Office (DMO) said on Tuesday.
The debt office said it would raise N50 billion from a local bond maturing in 2036, N40 billion on paper maturing in 2026 and N15 billion on debt maturing in 2020. All the debt notes are re-openings of previously issued paper, Reuters said.
