Naira seen on the ropes next week, as oil dollar sales dry up

Analysts have predicted that the naira is expected to lose more ground next week, hit by the slide in crude prices and a decline in dollar sales by oil companies operating there.

Wider risk aversion to emerging markets in general is seen keeping other currencies on the backfoot as well.

The Nigerian naira is seen trading lower next week, around the 183 level that it fell to on Friday, as sentiment in Africa’s top crude producer is soured by the sharp decline in oil prices.

The naira has been trading around the 178 – 182 range against the dollar in volatile trade the past week, with dollar sales from oil companies its only life line, as U.S. crude plumbed a 5-1/2-year low of $46.83 on Wednesday.

Now that those sales have dried up, it could test the lower end of that range, dealers say. It is trading well outside the central bank’s 160-176 target range since a November devaluation.