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The Naira appreciated to N118.50 to the dollar on the interbank market on Wednesday, its strongest level in five years and compared with N119.45 per dollar on Tuesday, traders said.
The Naira appreciated to N118.50 to the dollar on the interbank market on Wednesday, its strongest level in five years and compared with N119.45 per dollar on Tuesday, traders said.
The last time the Nigerian currency traded this strongly was in July, 2002 when the dollar exchanged for N117.00, dealers said.
The naira has rallied steadily against the U.S. currency since last month - buoyed by big capital inflows from offshore investors-forcing the Central Bank of Nigeria to suspend its twice-weekly forex auction to commercial banks.
'The market is very volatile now. Everything has gone haywire," one dealer said.
A CBN official, who asked not to be named, said the regulator might have to intervene to slow the naira's rapid appreciation, but declined to give details.
Analysts said the naira's appreciation was a temporary aberration not backed by market fundamentals.
'The appreciation of the naira could last till January due to the upsurge in foreign investors' interest in the economy and possible inflows from Nigerians returning for holiday in December," said Bismack Rewane, chief executive of Lagos-based Financial Derivatives Company.