Naira to Weaken Further – Finance Minister

Alt: = "Finance Minister, Zainab Ahmed"

The Nigeria Finance Minister, Zainab Ahmed on Thursday said the country’s local currency, the Naira,  is expected to weaken further over time even after it showed signs of recovering from a record low on Thursday.

Market reports show that 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.

Speaking in an interview in Egypt, Zainab Ahmed said Nigeria’s currency is likely to weaken even further, stating that “it will happen with time.”

She further stated that Nigeria will not accept International Monetary Fund, IMF  program to address the country’s fiscal challenges, which among other challenges include declining revenues and rising debt service costs.

Nigeria has over the years maintained multiple exchange rates dominated by a tightly controlled official rate and the unauthorized parallel rate at which many Nigerian access forex, which is about 60% weaker. The World Bank and IMF have advised Africa’s largest economy to unify its foreign rates. World Bank further stated that CBN's multiple exchange rates policy is discouraging foreign investors

The head of Africa Strategy at Standard Chartered Bank, Samir Gadio has said 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.”

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