By Chuks Emele
Nigeria’s naira snapped a recent trend of decline and gained as much as 4.4 percent in the parallel market amid improved dollar supply and higher oil prices.
The currency exchanged for 493 to a dollar for buyers on Thursday, while those selling dollars exchanged for as low as 480 naira, compared with rates of 505 naira for buyers and 502 for sellers the previous day.
“There’s been a surge of dollar supply and people who kept large quantities are looking for ways to offload,” said Abubakar Naka, an Abuja-based currency trailer.
The currency had seen more pressure since the Central Bank of Nigeria scrapped its official exchange rate, adopting the interbank Nigerian Autonomous Foreign Exchange window as it sought to achieve a single exchange-rate while discarding the former multiple rate system. Any easing of the exchange rate pressure will help the slowing of inflation recorded in recent months after almost two years of acceleration.
Nigeria faced severe hard-currency shortages after the coronavirus pandemic hurt revenues from the export of crude oil, the country’s main export. Prices have recently climbed past the 70-dollar mark, to its highest in the past four years.