Paul Wallace | From Bloomberg News
Nigeria’s naira is poised for its biggest monthly decline in more than six years as a delayed election and falling oil revenue batter investor confidence in the West African nation.
The currency of Africa’s biggest economy and oil producer fell 0.6 percent to 203 per dollar by 12:30 p.m. in Lagos, extending its loss since the end of January to 7.6 percent, the most since August 2008, according to data compiled by Bloomberg. The naira was the worst performer this month among 24 African currencies tracked by Bloomberg.
“The postponement of the elections was negative for the naira,” Ridle Markus, a strategist at Barclays Plc’s South African unit, said by phone from Johannesburg. “I’m not convinced the troubles are over. We have the naira on a gradual path to 220 by the end of the year.”
Nigeria’s currency has depreciated 24 percent since June 20 as oil prices declined nearly 50 percent. Investor confidence received a further blow when officials delayed the election by six weeks until March 28, saying the army needed more time to recapture areas in the north east under the control of Boko Haram militants.
The naira dropped to a record low of 206.32 on Feb. 12, the week after the delay was announced. The central bank introduced a trading restrictions a day later to reduce currency volatility, helping the naira to pare losses.