The Nigerian Naira hit a record low of 573 against the dollar on the black market on Monday, shrugging off news of the country’s Eurobond sale, meant to boost its currency reserves, traders said, weighed by a recent clampdown on retail forex operators.
The West African country sold $4 billion via Eurobonds last week after investors submitted bids of $12.2 billion. It is considering an additional issue.
But traders on the informal black market have shrugged off the news, citing the central bank’s ban on dollar sales to exchange bureaus in an attempt to channel demand from the unofficial market, where the naira is trading at much lower levels.
“The rise in foreign exchange reserves on the back of the recent Eurobond issuance is likely to give the central bank more space to support the naira,” said Virag Forizs, emerging markets economist at Capital Economics.