By Chijioke Ohuocha
ABUJA (Reuters) -Nigeria’s naira hit a new low of 643 against the dollar in volatile black market trade on Thursday, currency dealers said, citing dollar scarcity while import demand for wheat, fuel and diesel, was rising.
“Against this backdrop and amid higher dollar demand and ongoing FX (foreign exchange) supply constraints, we expect the naira to lose further ground in the coming days,” foreign exchange trading firm AZA Finance said in a note.
On Tuesday, the central bank hiked rates for the second time this year to try to tame inflation which is running at a more than five-year high as of June, but the bank made no mention of exchange rate policy.
Razia Khan, chief economist for Africa and the Middle East at Standard Chartered said on Tuesday after the central bank’s decision that until there were further steps towards foreign exchange harmonisation “parallel market depreciation may continue to exert pressure on prices.”
The naira has fallen to successive record lows on the parallel market due to dollar scarcity since July last year after the central bank stopped forex sales to retail currency traders to ease pressure on reserves and support the official market.
The currency, which hit a low of 620 naira on the black market last week, has been trading within a range in the official market.
(Reporting by Chijioke OhuochaEditing by James Macharia Chege)
