The Nigerian naira is seen under pressure as portfolio investors continue to exit local treasuries due to lower yields, traders said.
Trades were thin by midday on Thursday as most wanted to buy the dollar, with little supply. The naira last traded at 362.50 for investors on Wednesday.
Yields on Nigeria’s treasuries have fallen to around 12 percent from as high as 18 percent a year ago after the government repaid maturing bills rather than roll them over as it has done in the past. The outflow by investors has also been worsened by interest rate rises in the United States.
“A rise in FX rate might compensate for the drop in yields and that could attract investors back again,” one trader said of the naira, which was quoted at 305.90 on the official market, supported by the central bank’s regular interventions.