Nigerian naira drops against major currencies at the parallel market

Nigerian naira
  • Naira declines by 1.10% to N367 per dollar at the parallel market.
  • The Nigeria stock market also closes negative with NSE ASI losing 3.35% to close at 23,572.75pts.
  • Analysts express worry that the plunge in global oil prices may pressure the Nigerian government to devalue the naira.

Nigerian naira lost 1.10% to N367 per dollar at the parallel market on Wednesday due to uncertainty over oil price and coronavirus outbreak.

It also declined by 0.63% to close at N478 against the Pound and 1.74% to close at N410 against Euro.

The drop was the first major one since the Central Bank of Nigeria (CBN) introduced measures to ensure stability at the foreign exchange markets.

Some of the measures include the introduction of multiple fx regimes in the country and frequent interventions.

For years, it has stabled at N360 – N363 at the parallel market and N306 at the official market side. On the Investors & Exporters Foreign Exchange Window (IEFX), the Naira gained 0.37% to N368 per dollar.

It stayed stable at the highly official pegged price at N306.95 per dollar.

On Tuesday, the Nigerian stock exchange lost the most in almost a decade as sell-off persists. The Stock's All Share Index declined by 4.9%.

At today's trade, market further closed negative with NSE ASI losing 3.35% to close at 23,572.75pts. Today’s performances were mainly due to the losses recorded in NESTLE (-10.00%), DANGCEM (-10.00%), STERLNBANK (-9.93%), CONOIL (-9.88%) and UCAP (-9.83%) which offset the gains recorded in CHAMS (+10.00%), COURTVILLE (+10.00%), FCMB (+9.93%), UNILEVER (+9.91%) and UBA (+9.73%).

Analysts have expressed worry that the plunge in global oil prices may pressure the Nigerian government to devalue the naira. The oil-price war will take a toll on Nigeria's export earnings and depletes foreign exchange reserves of Africa's biggest economy.

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