Naira to weaken further, Minister warns

Minister of Finance, Zainab Ahmed has said that the Naira is likely to weaken further, adding that it would happen with time without giving any specific timeline.

According to Bloomberg News, the naira gained 0.0367% to 435.84 on the spot market as of 5:30 p.m. in Lagos on Thursday, after recovering from a record low of N436 to the greenback on Wednesday.

Ahmed also ruled out Nigeria taking on an International Monetary Fund program to address the country’s fiscal challenges, which include plummeting revenues and rising debt service costs.

READ ALSO: Naira hits N707/$ at parallel market

Africa’s largest economy maintains multiple exchange rates dominated by a tightly controlled official rate and the unauthorized parallel rate at which many Nigerians get dollars, which is roughly 60% weaker. The World Bank and IMF have urged Nigeria to unify its rates.

The weakening of the official rate “looks more like a gradual and partial convergence to higher effective exchange rate levels as the central bank already sells USD to corporates at up to 465 naira on the spot market and auctions for small firms,” said Samir Gadio, head of Africa Strategy at Standard Chartered Bank.

Gadio added that it was unlikely the outgoing government would adjust its official rate ahead of February’s presidential election.