The naira is coming under renewed pressure against the United States dollar as fuel importers increase foreign exchange purchases to build inventories.
Reuters reported on Thursday that the Nigerian currency, alongside those of Ghana and Uganda, is projected to weaken against the dollar over the next week, while Kenya’s shilling and Zambia’s kwacha are expected to remain broadly stable.
The report attributed the anticipated depreciation of the naira to increased demand for foreign exchange by fuel importers, who have been granted licences by the Nigerian Midstream and Downstream Petroleum Regulatory Authority to import refined petroleum products.
The naira was quoted at N1,368/$ on the official foreign exchange market on Thursday, compared with N1,383/$ a week earlier. It exchanged at about N1,420/$ in the parallel market.
A trader told Reuters that the local currency was likely to face downside risks as importers sought more dollars to finance fuel purchases. “We expect the naira to come under pressure, with downside risks skewed toward a depreciation as fuel importers front-load dollar purchases to build inventories,” the trader said.
