Nigeria’s naira dramatically fell further on the black market on February 18, Thursday as demand for the US increased dollar amid a plunge in crude oil prices and foreign exchange restrictions by the Central Bank of Nigeria (CBN). Earlier yesterday, the exchange rate on the parallel market was N385, but shockingly the rate had changed to N400 by last night.
The Punch reports that the naira hit 391 against the American dollar. The currency has continued in free-fall on the parallel market, having lost 26% of its value in less than two weeks. The naira, which closed at 310 against the greenback last Monday, has been depreciating constantly and significantly in the past 11 days. Financial analysts linked the continual fall of the local currency to panic buying of the dollar and other main hard currencies by importers, individuals and businessmen. Aminu Gwadabe, president of the Lagos-based Association of Bureau de Change Operators of Nigeria said: “As the currency drops in value, more people engage in panic buying. “There are importers looking for dollars at all costs to keep their businesses going.” The Central Bank of Nigeria stopped selling foreign exchange to money changers last month as a part of the latest in a series of controls aimed at supporting the naira at a fixed peg of 197-199 per dollar on the official interbank market since March 2015 year. Nigeria has limited foreign currency trading at banks, causing a shortage of dollars in an economy that imports most of its manufactured goods.
