ABUJA (Reuters) – Nigeriaâ€™s naira fell to a record low on the futures market for the five-year settlement and weakened sharply against the dollar on the spot market, traders said, on Thursday, its last trading session for 2020.
The central bank weakened the currency on the derivatives market, traders said, after the naira eased 4.2% on the over-the-counter spot market, widely quoted by foreign investors and exporters. It also eased on the forwards market.
Africaâ€™s biggest economy is facing its worst recession in 40-years brought on by an oil price crash, which has hammered its currency, created large financing needs and caused chronic dollar shortages, frustrating businesses and individuals.
The naira was quoted at 470 on the black market, where it trades more freely, at a premium of 19% to the bankâ€™s official rate of 381 set in July. It hit 608.10 naira to the dollar for the five-year settlement on the futures market.
The central bank has been selling forex on the spot and forward markets, but it has not been enough to meet rising dollar demand from importers and foreign investors exiting Nigerian assets.
The spot market was still seeking bids for dollars at the close, traders said. A few trades were recorded between banks, they said.
The bank has come under pressure from the World Bank and the IMF to allow the naira to float so that it can adjust to shocks from lower oil prices and remedy its balance of payments problem.
Reporting by Chijioke Ohuocha; Editing by Alison Williams, Angus MacSwan and Barbara Lewis