Naira depreciates further, trades at N380/dollar

• As CBN charges banks to provide for dollar loans

The Naira today depreciated further against the dollar at the parallel market, Business247 News Online reports.

The Nigerian currency exchanged at N380 to the dollar, from N378 it traded on Monday, while it exchanged against the Pound Sterling and the Euro at N495 and N415, respectively.

At the Bureau De Change segment of the market, the currency exchanged at N378 for the dollar, N490 for the Pound and N413 against the Euro.

It, however, appreciated at the interbank segment as it closed at N316.37 from N319.70 it posted Monday.

While speaking with traders at the market, they said that the scarcity of the greenback was stifling activities at the market.

They urged the Central Bank of Nigeria (CBN) to intervene in the foreign exchange market to ensure greater stability of the naira.

Meanwhile, the Central Bank of Nigeria (CBN) has told commercial lenders to set aside extra provisions against their dollar loans immediately in the wake of the sharp fall in the naira.

The naira has dropped 40 per cent since June, when Nigeria ditched its 16-month-old peg of 197 naira to the dollar in a bid to lure back foreign investors who had fled after a plunge in the price of oil, Nigeria’s economic mainstay.

Nearly half of banks’ loan books are denominated in dollars, and the CBN, had asked commercial banks after the naira float to ensure that portions of their loans that had become exposed due to the sharp falls in the naira were fully provided for on their income statements.

The banks have begun trying to restructure their loan books, but in a circular issued last week, the central bank instructed lenders to send evidence of the extra provision by this Wednesday.

The regulator has not quantified the increased in the balances of banks’ dollar loan books, which have been put under pressure not only by the drop in the naira but also by a contraction in the economy, and an acute shortage of foreign exchange, all a consequence of the slump in the oil price.

Non-performing loans are expected to jump to 12.5 percent of total loans this year, up from the central bank’s target level of 5 percent at the end of last year, as lenders suffer a hangover from an oil sector credit boom that ended abruptly in 2015, according to Agusto & Co, Nigeria’s main rating