As the nation continues to feel the negative effects of the worsening economic situation, the naira which sold for 485 per dollar on the streets of Lagos and Abuja on Tuesday, is expected to weaken further to 500/dollar before the end of the year according to currency analysts.
Foreign exchange traders said the naira had been trading at 485/dollar at the parallel market since Friday.
Last Thursday, the naira was sold for 495/dollar. The local currency recorded a major gain against the United States dollar at the parallel market after preparation for Christmas celebration weighed on the demand for the greenback.
It closed at 485/dollar on Friday evening, up from 495/dollar recorded earlier in the day.
Last Monday and Tuesday, the naira traded flat at 490 after closing at 487/dollar the previous Friday.
The naira has been under severe and continuous pressure as the scarcity of the US currency continues to create ripples in the financial markets and economy.
Before falling to 487 the previous Friday, the local currency had consecutively closed flat at 485 about two weeks ago.
“The challenge at the forex market is still the supply issue; price (exchange rate) is determined by the interplay of demand and supply,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said.
Experts expect the naira to weaken further against the dollar as the New Year approaches.
The tempo for this is expected to be set on Wednesday (today) when work begins following the public holidays observed on Monday and Tuesday.
A few weeks ago, the naira closed flat at 470/dollar against the greenback for some days.
The naira plunged to 470/dollar, down from 455/dollar on the back of a fresh dollar shortage at the official and parallel forex markets.
The naira has, however, consistently closed around 305.5 a dollar level since August via the official window.
The local currency has been under persistent pressure both at the official and parallel foreign exchange markets owing to the acute shortage of the United States currency.
Currency dealers said the consistent clampdown on black market operators by security agents had driven some currency retailers underground, putting more pressure on available dollars.
