WEEKAHEAD-AFRICA-FX: Nigeria’s black market Naira may hit 500 Naira to US dollar

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May 21 – Nigeria’s currency is expected to come under pressure on the black market next week, currently N460 to a US dollar

NIGERIA

Nigeria’s naira is seen weakening on the black market as dollar shortages at official sources cause investors and importers to channel demand to the parallel market, traders said.

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The black market naira traded on the streets fell to 460 against the dollar on Thursday, reflecting the build-up of demand. The naira was quoted at 450 last week on the unofficial market after a lockdown was eased.

Dollar demand from investors and importers has ballooned with payment obligations accumulating amid hard currency shortages triggered by the oil price crash.

The Nigerian central bank governor has warned domestic and foreign investors against patronising the black market, saying it was helping to overheat that market.

The naira is seen rangebound on the official and over-the-counter spot markets, traders say.

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