Barely one week after the Central Bank of
Nigeria devalued the naira by 8.4 per cent in a
bid to reduce the pressure on the falling national
currency, the naira on Monday again fell by 3.4
per cent to a new low of N184.10 against the
dollar, down from the N178 it fell to on Friday.
The CBN’s Monetary Policy Committee had, on
Tuesday, devalued the naira from N155 to N168
per dollar, following several weeks of continued
fall that brought the naira to N177 per dollar
last Monday.
The CBN was aiming to keep the dollar within
the target band of N171.5 to 176.5 (N168 plus
or minus five per cent).
Last Wednesday, a day after the devaluation, the
naira rebounded slightly but closed at N176.80,
about 30k outside the lower end of the CBN’s
target band.
On Thursday, the naira fell by 0.22 per cent to
N177.40 against the dollar, trading further lower
than the target band.
The national currency has been volatile and
under pressure since the central bank announced
the devaluation on Tuesday.
On Friday, the naira fell by 2.5 per cent despite
central bank intervention, and it briefly touched a
record low on concerns that the Organisation of
Petroleum Exporting Countries’ decision not to
cut oil output would put further pressure on
Nigeria’s shaky finances.
On Monday, the naira crashed to N184, from
N178 which it fell to on Friday.
Foreign exchange dealers linked the fall of the
naira after the devaluation to the market’s
inability to cope with high demand for the dollar
both at the interbank and Retail Dutch Auction
System forex markets.
Some industry players predicted that the dollar
might fall further in the coming days if the CBN
failed to cope with the expected demand.
The external reserves have dropped by over 17.5
per cent to $36.8bn as of November 27,
according to the new report on the CBN’s
website on Monday.
Analysts said the falling global oil prices had
brought an uncertain outlook to the naira and
the currencies of other oil-dependent nations.
The Russian rouble and Angola’s kwanza have
continued to be under pressure.
Brent crude fell more than $6 to $71.25 a barrel
after the OPEC ministers’ meeting in Vienna left
the group’s output ceiling unchanged despite
huge global oversupply, marking a shift away
from its long-standing policy of defending prices.
Oil sales provide around 95 per cent of Nigeria’s
foreign exchange and the naira is being driven
down by concerns that the falling oil price will
put further pressure on the nation’s shaky
finances.
Punch.
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