More concerns for CBN, as currency speculators crash Naira to record low

The continuous fall of the Nigerian currency, the naira reached a record low against the dollar at the parallel market on Wednesday.

According to market data, Naira closed at N493 on Wednesday a 1.23 percent drop from N487 it traded on Tuesday.

This occurred as black market speculators begin to take advantage of the Central Bank of Nigeria’s (CBN) adoption of a new exchange rate to buy up and hoard dollars.

Market observers are now predicting the action of currency, speculators will not only further increase pressure in the market but see naira fall above N500 to the dollar by next week.

The last time Naira touched N500/$1at the black market was on November 30 last year.

However, Nigerian naira strengthened marginally to the US dollar on Wednesday at the Investors and Exporters (I&E) window.

Data from FMDQ shows the Naira closed at N411.50 to the dollar, a N0.06 or 0.02 percent appreciation from N411.56 it traded on Tuesday.

FMDQ data also showed market participants bid for dollars at a low of N420.25 and a high of N363.00.

This occurred as the dollar supply grew from $130.50 million to $471.85 million. This is a 261.5 percent increase.

The difference between black market and official market values has now increased to N81.50 since Wednesday trade.