Nigeria’s naira was expected to come under pressure on the parallel market next week after JP Morgan said it was removing Nigerian debt from its influential emerging markets bond index by the end of October, forcing fund managers to sell.
Today, the Nigerian currency traded at 223.5 to the dollar on the parallel market , against 220 to the dollar last week.
It closed at 197 to the dollar on the interbank market, the same level it was pegged in February by the central bank in its bid to curb speculation and rapid depreciation.
“The parallel market exchange rate, which stabilised somewhat in recent weeks as the central bank provided dollar liquidity to some outlets, could well depreciate on increased forex demand stemming from heightened risk and investor concern,” NKC African Economics said in a research note.