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Nigeria’s finance minister sees naira depreciating further at official window

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Nigeria expects its local currency to weaken further over time even after it showed signs of recovering from a record low on Thursday, the country’s finance minister said.

The naira was flat per cent to N436.33 on the spot market as of Friday, after recovering from a record low of N436 to the greenback on Wednesday.

Nigeria’s currency is likely to weaken even further, Minister of Finance Zainab Ahmed, said in an interview from Egypt’s new administrative capital. “It will happen with time,” she said, without giving any timeline.

Ahmed also ruled out Nigeria taking on an International Monetary Fund (IMF) program to address the country’s fiscal challenges, which include plummeting revenues and rising debt service costs.

Africa’s largest economy maintains multiple exchange rates dominated by a tightly controlled official rate and the unauthorized parallel rate at which many Nigerian get dollars, which is roughly 60% weaker. The World Bank and IMF have urged Nigeria to unify its rates.

The weakening of the official rate “looks more like a gradual and partial convergence to higher effective exchange rate levels as the central bank already sells USD to corporates at up to N465 on the spot market and auctions for small firms,” said Samir Gadio, head of Africa Strategy at Standard Chartered Bank.

Gadio added that it was unlikely the outgoing government would adjust its official rate ahead of February’s presidential election.

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