Nigeria’s five-year naira futures slid past N550 to the dollar last week after the central bank weakened the naira on the derivatives market, signaling more pain to come for the currency, traders said.
The bank softened the currency on average by N73 across tenors, traders said, with the one-year maturity revised by N27.
Reuters reported that the five-year naira futures, introduced in February, weakened to N569 per dollar, from N413 in the previous session. The naira has been hitting new lows on the black and over-the-counter spot markets since March after the central bank adjusted its official rate, implying a 15 per cent devaluation.
An oil price crash last month, triggered by a coronavirus pandemic, also worsened dollar shortages.
Dollar demand has been swelling and piling up pressure on the naira, just as importers with past due obligations have been scrambling for hard currency while providers of foreign exchange such as offshore investors have exited.
The market differential between one-year naira futures and forwards narrowed to N104 on Thursday from N130 in March, showing that the bank is keen to close the currency gap after an oil price plunge put the naira under pressure.
The non-deliverable forwards (NDF) market traded in London, which gives an indication of where the currency could trade in a year’s time, quoted the naira at N525 to the U.S. dollar.
The central bank devalued the official currency rate two months ago in a move to converge a multiple exchange rates regime which it has used to manage pressure on the naira.
But dollar shortages has caused the gap between the black market and official market to widen especially after the bank suspended dollar sales in the wake of a coronavirus lockdown.
The bank has resumed dollar sales to local clients last week, selling around $100 million per week but is yet to sell to offshore investors, traders say, estimating backlog demand at around $1.5 billion to $1.8 billion.
YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE
Lagos Will Not Hesitate To Review Easing Of Lockdown If… ― Sanwo-Olu
Lagos State governor, Mr Babajide Sanwo-Olu, on Saturday warned that the state government will not hesitate to review the terms of easing of lockdown currently in operation if it continues to see evidence that Lagosians are determined to flout the rules… Read full story
Agency Arrests LG Chairman For Allegedly Sharing Palliatives To Police, DSS, Others
Kano State Public Complaints and Anti-Corruption (PCAC) has arrested Kumbotso Local Government Council Chairman, Alhaji Kabiru Ado Panshekara over alleged abuse of power in the distribution of government palliatives in his local government… Read full story
Journalist Tests Positive For COVID-19 In Bauchi
A journalist working in Bauchi State has tested positive for the novel coronavirus, the state’s deputy governor, Mr Baba Tela, announced on Saturday. Tela, who is also the chairman of the Bauchi State Task Force on COVID-19 and Lassa fever, made the announcement at a news conference at Government House in Bauchi… Read full story
Yoruba, Biafra UNPO Membership: Risk Of Nigeria Breaking Up Now Higher
Concerns over the risk of Nigeria breaking up with some ethnic nationalities pulling out of the union appear to have been heightened with the admission of the Yoruba and Igbo nations into the Unrepresented Nations and Peoples Organisation (UNPO)… Read full story
Latter-Days Saints Refutes Claim Church Refunding Tithes To Members
Contrary to the news doing the rounds that the Church of Jesus Christ Latter-Days Saints, has concluded plans to refund the total amount of money paid as tithe in the last three years to members across the world to cushion the effect of the coronavirus pandemic, the church has debunked the news as well as described it as fake… Read full story
COVID-19: 160 Stranded Nigerians Depart U.S For Abuja
The first batch of Nigerians stranded in the United States due to the coronavirus (COVID-19) pandemic are on their way back home. The News Agency of Nigeria (NAN) reports that 160 Nigerians, including eight infants, made the first batch of evacuees… Read full story
Police, NSCDC Officers Beat Up Soldier For Refusing To Wear Face Mask
A combined team of men of policemen and men of the Nigerian Security and Civil Defence Corps (NSDC) beat up a soldier in Benin on Saturday after he allegedly refused to wear a face mask. The incident happened between 1 pm and 1:30 pm at the popular Lagos Street/Oba Market Street junction in downtown Benin… Read full story
A’Ibom Intercepts Dead COVID-19 Victim, Isolates 6 Smugglers Of Body From Lagos
Border police officers manning the major entry point into Akwa Ibom State at the Abia/Akwa Ibom common boundary at Obot Akara Local Government Area have intercepted the remains of a suspected coronavirus patient said to have been smuggled into the state from Lagos… Read full story
I’m Not The Cause Of Your Problem, Ortom Tells Benue Index Case
Governor Samuel Ortom of Benue State has informed the United Kingdom returnee who is the state’s COVID-19 index case, Mrs Susan Idoko Okpe, to redirect her grievances to the Nigeria Centre for Disease Control (NCDC), saying he is not the architect of her woes… Read full story
Warm Weather Doesn’t Curb COVID-19 Spread, Studies Reveal
Contrary to the general knowledge across the globe, two studies have revealed that warm weather does not kill off the coronavirus or curb its spread. The Daily Mail of UK reported that the studies, carried out by US and Canadian researchers, analysed more than 370,000 cases in thousands of different cities in… Read full story
COVID-19: Lagos To Introduce Community Management Of Cases
Lagos State government says it will introduce the management of COVID-19 patients at community levels, so as to enhance the management of cases in the state. The state governor, Mr Babajide Sanwo-Olu, made the disclosure while giving an update on the management of COVID-19 and review of the lockdown… Read full story