The naira is expected to be under intense pressure from the dollar starting next week, no thanks to Nigeria’s poor export earnings due the COVID-19 pandemic.
This is coming as Nigeria’s commercial banks struggle to meet dollar demands by importers who are seeking to meet past due obligations.
Already, the naira has been depreciating across the official and parallel markets since mid-March, following a crude price slump. As reported, the Central Bank of Nigeria devalued the naira and suspended foreign exchange sales to Nigeria’s retail currency traders.
Earlier this past Thursday, the naira dropped to N387.30 per dollar and then declined further to N387.70 on Friday at the official currency spot market.
On the black market, however, the naira was quoted at about N415 per dollar, having fallen more than the spot market rate.
Recall that the drop in crude oil prices and Nigeria’s dwindling foreign exchange reserves had led to experts’ predictions that it was only a matter of time before the CBN decide to devalue the naira.
In addition, America’s biggest bank, JP Morgan Chase, had reported that it expects a 10% devaluation of the naira to N400 per dollar by the end of the end of Q2 2020.