Nigeria naira firms on thin volumes as traders eye dollar liquidity

22 Jun, 2016

LAGOS: Nigeria's naira firmed to 281.72 in early trades on Wednesday on thin dollar volumes, traders said, on its third day as a floating currency after the central bank ditched a 16-month old peg on the exchange rate.

The naira opened at 282 to the greenback, after closing weaker at 284 the previous day, traders said. The Nigerian currency slumped 30 percent at its float on Monday.

Indicative rates on Wednesday showed banks were quoting to buy the dollar between 281 to 295 naira.

Only $360,000 has exchanged hands by 1015 GMT, traders said, adding that the interbank market will become active once dollar liquidity increases.

In the non-deliverable forwards market, the naira rose against the dollar on Wednesday, with the one-month contract quoting the currency as firm as 288, after hitting 317 on Monday.

The central bank's move to float the currency has narrowed the gulf between the naira rates available on the official and black markets, though unofficial traders were still offering it at 340 to the dollar on Wednesday.

Copyright Reuters, 2016

Read Comments