Naira weakens to 505 against dollar as forex reserves dip
The Nigerian currency fell against the dollar at the parallel market on Friday as the country’s foreign reserves look set to plunge below $33 billion.
The naira closed at 505 to a dollar at the parallel market, down from 503/$1 on Thursday. It weakened by 0.12 percent to 411.75/$1 at the investors’ and exporters’ forex window, according to FMDQ Group.
In May, the Central Bank of Nigeria devalued the naira as it adopted the NAFEX exchange rate of N410.25 per dollar as its official exchange rate, days after removing the N379/$1 rate from its website.
The country’s forex reserves, which have been on a downward trajectory in recent months, fell to $33.12 billion on July 7 from a high of $36.52 billion on Jan. 25, according to the CBN.
Markets Reporters exclusively reported on Thursday that forex reserves had tumbled to the lowest level in more than three years and eight months, despite the rally in the price of crude oil, the country’s major source of forex earnings.
The forex reserves fell by $14.65 billion in three years from $47.79 billion on July 5, 2018 to $33.14 billion on July 5, 2021, the lowest since Oct. 16, 2017, according to data obtained from the central bank.
