Naira clinched a meagre gain against the U.S. dollar at the official market on Friday after falling to an all-time low a day earlier.
The currency which opened trading at N421.60, closed at N425.00 to a dollar at the close of business on Friday, according to FMDQ, where forex is officially traded revealed.
This represents a N0.05 or 0.01 per cent appreciation from N425.05 it exchanged hands with the greenback currency in the previous session on Thursday.
Before the close of business on Friday, naira hit an intraday range of N411.10 (high) and stooped to a low of N444.00 before settling at N425.00 per $1 on Friday, the last business day of the week.
The highest rate the naira traded this week was when it closed at N421.00 on Monday and Tuesday respectively, while the weakest rate the naira exchanged officially this week and in this year so far was N425.05 per $1 it closed at on Thursday.
The local currency has been trading between N419 and N425 for months, as Nigeria continues to suffer foreign exchange shortages.
Olufukeji Adegbeye, analyst at Value Flow Trading, said Nigeria’s dependence on oil exports as the major source of forex continues to put pressure on naira as the Central Bank of Nigeria cannot meet demand.
“Increased demand with limited supply causes the naira to depreciate against the U.S. dollar,” he said Friday.
Things have become worse with foreign direct investment slowing in the face rising insecurity.
“If you then add the increased insecurity in Nigeria that is seriously discouraging the inflow of dollars via Foreign Direct Investment into the economy, this paints a gloomy picture for the naira,” Mr Adegbeye said.
Forex supply increased slightly by 2.9 per cent with $78.86 million recorded at the close of business on Friday against the $76.64 million posted in the previous session on Thursday.
At the parallel market, dealers exchanged the naira at N610.00 and sold at N613.00 to a dollar on Friday.
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