The national currency – Naira – weakened to 364 per dollar on Friday, from a quote of 363.50 the previous day as falling oil prices tightened liquidity on the currency market, traders said.
A dollar shortage was initially caused by a slowdown of foreign inflows after local debt market yields declined.
The naira broke through resistance at 363 per dollar, where it has been quoted this week, as liquidity worsened, traders said
“The (naira) is reacting to external shocks while local (dollar) demand is increasing,” one trader said
“(Dollar) Inflows have slowed, yields have tanked and oil prices are declining.”
The global oil price dropped to $58.69 per barrel on Friday while Nigerian oil suffered the slowest sales of the year in August, traders said, as U.S. exports of competing light, sweet grades flood traditional markets in Europe and Asia.
Crude sales account for bulk of Nigerian government’s revenue and foreign exchange earnings.
- Agency Report