Nigeria Naira Weakens to 10-Month Low on Interbank Market

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Nigerian naira weakened to a more than 10-month low on the interbank market on Tuesday as Africa’s largest economy continues to face low-dollar supply and high demand for the greenback.

The local unit depreciated 5.3% to 401 naira per dollar on the spot market, the lowest since March 30 last year, before paring losses to 397.50 as of 1:54 p.m. in the commercial capital, Lagos. The naira closed at 398.5 to the greenback on the investors’ and exporters’ window on Monday.

Nigeria Naira Weakens to 10-Month Low on Interbank Market

The West African nation’s currency has been devalued twice since March last year. Another adjustment would be in line with investors’ expectations for a devaluation after the central bank weakened the non-deliverable naira forward contracts rates and raised interest rates.

Africa’s largest crude producer has been reluctant to allow an adjustment of its currency after the oil-price crash early last year cut foreign-exchange inflows from official sources. A rebound in crude prices in recent weeks would boost the central bank’s reserves and improve dollar reserves, which have been under pressure.

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