The naira on Monday depreciated to N500/$1 after recording marginal gain against the greenback at the weekend when speculators on the naira were reported to have burnt their hands.
After reaching a four year low against the dollar at N505 the naira had sprung to N485 last week before sinking again to N500 GreenWhiteGreen GWG reports.
The naira had closed last week at N498/$1, N2 weaker than current position of the local currency.
Besides, it was also revealed that the country’s foreign exchange (forex) reserves have dropped to $33.79 billion as at June 17.
The fall in the foreign reserves to current position has been matched with the continued rise in dollar demand by manufacturers and forex users at the retail end of the market.
The Nation in a report showed that that on April 1, the reserves stood at $34.85 billion and $34.43 billion as at May 17, data from the Central Bank of Nigeria (CBN) website showed.
At the weekend, the naira also weakened against the dollar on the Nigerian Autonomous Foreign Exchange ( NAFEX) rate window, dropping to N411.75 from N410.80 to dollar.
However, at the parallel market, the naira shrugged off the drop in reserves and rate depreciation at the official market to record marginal gains, trading at N498 to dollar, stronger than N505 to dollar the previous week.
Inflation also fell slightly to 17.93 per cent in May from 18.12 per cent in April, though it remains well above the CBN’s target range of between six per cent and nine per cent.
The Nation also reports that the World Bank said Nigeria must do more to make its exchange rate system clearer, despite recent efforts to move to a more flexible regime.
The bank said Nigeria’s request for a $1.5 billion loan will hinge on the progress the country makes on its exchange rate system management with analysts predicting sustained pressure on the naira in the coming days if dollar scarcity persists.
The reserves decline, has also been attributed to drop in diaspora remittances due to patronage of illegal remittance channels by Nigerians in diaspora.