Naira Seen Under Pressure Next Week as Oil Prices Fall

Naira currency is seen under pressure next week after oil prices continued to decline and offshore investors sold down their local debt holdings.
By 1200 GMT on Thursday, the currency was trading at N163.90 to the dollar, compared with Wednesday’s close of N163.45 due to strong demand from importers and other forex end users. The naira closed at N162.90 to the dollar last Thursday.
“We have seen strong buying interest from some offshore investors in the last couple of days, while the market is actually jittery on the continued drop in the oil price in the international market,” one dealer said.
Oil traded slightly lower below $99 a barrel on Thursday, pressured by ample supply.
The Nigerian currency crossed the N163 to the dollar level on Wednesday despite intervention by the central bank. The bank has been selling undisclosed amounts of dollars directly to lenders this week to try to stabilise the naira, which has declined by about 3.5 per cent this year.
Dealers said the ability of the central bank to continue to support the local currency would depend on the oil price and monetary policy measures to stem the drift.
The central bank’s monetary policy committee is due to meet this Friday to set Nigeria’s key interest rate.

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