Posted on Fri 26 May 2017, 02:09 PM

The naira is seen trading within a range on both the black market and official interbank window as the central bank continue to inject more dollars to boost liquidity in the foreign exchange market.

The central bank has consistently intervened in the foreign exchange market since February and has sold more than $4 billion to various sectors of the economy, this has improved liquidity and helped to ease pressure on the naira.

The naira was quoted at 379.07 per dollar at the investor window on Thursday, according to the market regulator FMDQ OTC Securities Exchange, while it traded flat at 380 to the dollar on the black market.

Commercial lenders were yet to put up a quote on the official interbank market, but the naira closed at 305.90 a dollar on Wednesday on the market.

Nigeria’s economy stayed in recession in the first quarter and shrank more sharply than thought at the end of last year.
Data released on Tuesday confirmed that the country remains in recession despite the drop in inflation rate.

This comes as signs of growth in the oil sector fuelled hopes of an upturn in coming months.

The economy shrank by 1.5 percent in 2016 for its first annual drop in 25 years, hit by a shortage of hard currency and lower revenues from its dominant oil sector as world crude prices stayed under pressure.

Gross domestic product shrank a further 0.52 percent year-on-year in the first quarter, the National Bureau of Statistics (NBS) said on Tuesday, also revising the fourth quarter contraction to 1.73 percent from 1.30 percent.

Supported by higher oil revenues, the central bank has in recent weeks succeeded in narrowing the spread in the naira currency’s official and parallel market rates.

It has sold more than $4 billion since it started intervening on the official foreign exchange market in February to try to ease pressure on the naira.

The currency has firmed on the black market from a record low of 520 to the dollar hit in February prior to the interventions.

 

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