The naira plunged further against the United States dollar to a new record low of 480 on Thursday, down from 472 it recorded on Wednesday.
The currency had continued its two-week free fall on Monday, closing at 445 to the dollar after tumbling to 439 on Friday. However, at the interbank market on Thursday, the naira closed at 305.31 to the dollar, up from 312.99 on Wednesday.
On Tuesday, the currency closed at 452 to the greenback. Also on Tuesday, the external reserves hit an 11-year low of $24.61bn.
“Dollar is very scarce in the market right now because many people don’t know how low it will fall in the near term, so people are holding on to their hard currencies in order to watch the direction of the market,” one dealer said.
The President, Association of Bureau De Change Operators, Aminu Gwadabe, told Reuters that forex traders from neighbouring countries and some importers had also been moving in recently, mopping up dollars and putting pressure on the naira in a possible speculative bid.
Chronic dollar shortage plunged the local currency to a wave of depreciation, which economic and financial analysts have linked to speculative attack on the naira and increased demand from companies and individuals.
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After trading between 423 and 425 for several weeks, the naira plunged to 428 last Wednesday. This came a day after the Central Bank of Nigeria’s Monetary Policy Committee retained the lending rate at 14 per cent contrary to calls by the fiscal authority, economists and stakeholders.
Gwadabe said that the planned commencement of distribution of forex by Travelex could not hold due to some bottlenecks.
Travelex, an international money transfer organisation, ought to have begun the distribution forex to the BDC operators on Monday.Its intervention was postponed to Wednesday, but again, it could not hold.
According to him, Travelex has the technology to sell forex to about 1,000 BDCs in a couple of hours, which is a major advantage.
The ABCON leader had said the sale of forex to the BDC operators by Travelex would help to stem the tide of volatility in the exchange rate and subsequently close the huge gap between the official and parallel market rates.
He said the latest decline in the naira value was as a result of the activities of speculators.