The value of Nigeria’s latest naira exchange rate — this one for portfolio investors — eased for a second day on Wednesday despite the central bank supplying $25 million to boost liquidity.
The naira was quoted at 378.54 against the dollar on the new foreign exchange trading window introduced by the central bank for investors, data from market regulator FMDQ OTC Securities Exchange showed.
It closed at 374.96 naira in its previous session. On the main, official interbank market the currency was quoted at 305.90 naira. It was 388 naira on the black market on Wednesday.
The central bank said on Monday it will allow investors to trade the naira at market determined rates — a move intended to improve the dollar supply.
This did, however, introduced yet another exchange rate to the five existing ones.
“The new window reflects the true value of the naira,” one trader at a major Nigerian bank, told Reuters. “Once the central bank reduces intervention on the interbank market the naira will trade closer to the new window.”
Nigeria is battling a currency crisis brought on by low oil prices, which has tipped its economy into recession and created chronic dollar shortages.
It has created multiple exchange rates to help mask the pressure on the naira — including for Muslim pilgrims and for paying school fees — but wants to attract foreign investors with the new market determined exchange rate and at same time maintain a strong currency to ward off import-induced inflation.
