Nigeria's naira touched a new record low of
183.05 against the dollar on Monday, driven by
concerns over a sustained low oil price and
expectations foreign investors would demand
more dollars to pull out of local assets, dealers
said.
The currency was trading down 2.4 per cent
from Friday's closing level.
The central bank has struggled to keep the naira
within its preferred band even after devaluing the
currency by 8 per cent last Tuesday in a bid to
halt a decline in the foreign reserves of Africa's
biggest economy.
Oil sales provide around 95 per cent of those
reserves.
The bank's target band after devaluation is 5 per
cent plus or minus 168 to the dollar, but doubts
remain about whether it went far enough given
the likelihood of continuing low oil prices and
the fact that Nigeria's oil savings were being
depleted even during a period of record high
crude prices.
The coming weeks will test the bank's ability to
maintain that level – the naira is trading well
below it and forex reserves are running out,
reports Reuters.
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