• Wednesday, November 29, 2023
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Naira hits record low after FG delays presidential election

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The naira opened at a record low on Monday after Nigeria delayed its presidential election by six weeks, citing security concerns due to an Islamist insurgency in the north.

The electoral commission’s decision late of Saturday to postpone the Feb. 14 vote until March 28 added to political uncertainty which, along with a slump in oil prices, has put intense pressure on the naira since last year.

The currency has been trading well below a target of 160-176 to the dollar set following an 8 percent devaluation in November, despite regular central bank intervention. It opened at a record low of 194.75 naira to the dollar on Monday, and quickly fell 1.1 percent to 196.05, from its previous close of 193.90 on Friday.

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The poll will pit incumbent President Goodluck Jonathan of the People’s Democratic Party (PDP) against former military ruler Muhammadu Buhari of the All Progressives Congress in what is set to be the most hotly contested election since the end of military rule in 1999.

The postponement could stoke unrest in opposition strongholds such as the commercial capital, Lagos, and Nigeria’s second city, Kano, because the opposition has been staunchly against a delay.

The decision to postpone the vote was widely viewed as the electoral commission yielding to pressure by the PDP, which the opposition said feared it could lose.

Concerns over security, due to the Sunni jihadist insurgency that has killed hundreds in the northeast, have been raised several times as a reason for a delay, although the electoral commission had outlined red zones where the vote could not be held and alternative polling units for the affected constituencies.

Dealers in the currency market were reluctant to show two-way quotes on the naira in early trades.

The central bank has been intervening almost daily in the interbank market since the start of the year as the naira has suffered as a plunge in oil prices has weakened Nigeria’s oil-producing economy, causing foreign investment to dwindle.