The naira edged higher to about N260 to a dollar on the parallel market yesterday, compared with about N266 to a dollar it was before last week’s public holidays.

Findings from most of the parallel market traders at the Murtala Mohammed International Airport and other areas around Ikeja yesterday attributed this to an increase in supply of the greenback from autonomous market sources, especially from Nigerians abroad who visited the country for the yuletide.

The interbank official forex market which was shut down for the yuletide is expected to be re-opened on January 4, 2016. The naira had depreciated to about N280 to the dollar about three weeks ago as a result of dollar scarcity that hit the market.

The declining oil prices as well as the unwillingness of the Central Bank of Nigeria (CBN) to devalue the naira amidst constrained reserves has continued to worsen foreign exchange (forex) liquidity position of Nigerian banks, Renaissance Capital (RenCap), a financial advisory and research firm, stated.

However, RenCap opined that should the forex scarcity persists in a weak oil price environment, banks’ asset quality and international obligation default risks could be significant.

Credit: Thisday