Naira crashed to its lowest level at parallel market since the start of the new foreign exchange regime, yesterday. This follows report that the Naira’s black market value which had slipped to N381/$1 yesterday day dropped a shocking 9 points to trade at N390/$1 by yesterday afternoon. The currency also crashed to N500 to one pound and N422 to one Euro.
While currency traders blame the poor performance of the Naira to the scarcity of the greenback, economists have advised the federal government and the Central bank of Nigeria (CBN) to consider alternative policy options to halt the currency’s decline.
The scarcity of the greenback in both the foreign exchange and interbank markets has fuelled continuous fall, but according to currency traders, the lack of CBN’s intervention is not helping to prevent the free fall.
“We will begin to see huge activity in the market when the CBN start selling forex to us. There will be a working relationship between the interbank and parallel market rate and liquidity issue. The scarcity is becoming unbearable.” a Lagos based BDC operator told agency reporters.
It should be recalled that , naira slid down against the United States dollar as the exchange rate value dropped as against the 380 recorded at the close of business on Friday, hovering around 375 and 380 points against the dollar.
The continuous slide of the naira has been attributed to the inadequate forex liquidity at the interbank market by economic and financial experts.
The hope of the Nigerian naira rising against the greenback is however bleak as analysts have predicted that the local currency will further weaken against the dollar as the week continues owing to the limited supply of dollar.
Foreign investors, due to the current economic situation in the country, have continued to stay on the sidelines until the naira recovers against the dollar.
Recall that following the new policy implemented by the Central Bank of Nigeria last week which ordered an increase in interest rate in a bid to lure foreign investors into the local market, the naira on Wednesday recorded an all time low of 334.50 to a dollar.
The naira which at the end of last week closed at 321.16 last Friday, further sliding down as compared to the previous Friday which it closed at 292.40 rose a few points against the dollar to close at 316.37 on Monday.