As a result of a crackdown in the parallel market, currency traders and the persistent scarcity of the greenback, naira is further weakening against the United States dollar, Reuters has reported.

The local currency fell 2.08 per cent week-on-week on Thursday to 480 to the dollar on the parallel market against 470 a dollar last week, while it was quoted by commercial lenders at 314.80 a dollar on the interbank market.

According to the reports, the foreign exchange demand by small businesses was set to surge ahead of holiday season sales.

The naira has, however, consistently closed around 305.5 a dollar level since August via the official window.

“The consistent clampdown on black market operators by security agents has driven some currency retailers underground, putting more pressure on available hard currency,” one dealer said.

But the Kenyan shilling could strengthen against the dollar in the coming week due to subdued importer demand and increased inflows from overseas remittances, traders said.

At 0742 GMT, commercial banks quoted the shilling at 101.80/102.00 to the dollar, the same as last Thursday’s close.

“From the data we’ve seen in the past, we normally tend to see an uptick in the Diaspora inflows during this month of December,” said a trader at a commercial bank.

Credit: dailytrust