The naira yesterday hit a record low of 237 to the dollar on the black market, the traders revealed.
A trader in Lagos, Abubakar Sadiq explained that this is the first time the local currency exchange at this rate against the dollar in the Bureau de Change segment.
He said the sharp drop of the currency was due to the scarcity of the forex in the market and the inability of some importers to source the forex from the banks and the CBN.
The traders attributed the sharp drop of the local currency to the new policy by CBN that banned the importers of about 41 items in the country including some major food items like rice, fish and other canned foods.
According to Reuters, trading records, at the interbank market, the naira traded at 199.45 at 1210 GMT on Thursday, near central bank’s pegged rate of 196.95. Investors questioned how long the bank’s rate could hold there, when the currency was trading further and further away on the parallel market.
Ibrahim Muazu, CBN spokesperson told Reuters that the official interbank market had the capacity to handle legitimate dollar transactions but that people preferred to use the unofficial parallel market for undocumented transactions.
The central bank has spent around $5 billion since January defending the naira, hit by last year’s plunge in oil prices.
On Wednesday, the central bank said its foreign exchange reserves had started to recover gradually with its management of dollar demand and government’s effort to plug all leakages.
Spot reserves stood at $31.89 billion on July 7, the spokesman said, however central bank’s moving average data showed reserves at $29.63 billion on July 7.
Source: Daily Trust