BREAKING: Naira Crashes To 241 Against Dollar

On Monday the naira hit another record low of 241 against the dollar at the parallel market, Reuters reported.  The source notes that the ban on importers from accessing the Nigerian foreign exchange markets for the importation of 41 items had led to the volatility of the naira-dollar exchange rate at the black market.

Nigeria’s currency has fallen by 10.5 per cent from 218 to 241 against the greenback since June 23. According to foreign exchange dealers, the artificial scarcity of the United States currency still pervaded the market. Financial experts say the CBN need to devalue the naira to allow the local currency achieve an equilibrium price against the dollar. However, the CBN stated that it would not be focusing on the thinly-traded parallel market when determining the exchange rate, adding that people preferred to use the unofficial market for undocumented transactions.

“Foreign investors had been on the sideline, waiting for the CBN to devalue the naira before investing in naira-denominated assets.Local and foreign analysts had predicted that the naira might hit 250 against the dollar at the parallel market any time soon if the artificial scarcity trend continued,” the source says.

The CBN appears to be in a fix as the spread between the official and parallel market continues to widen by the day. Reuters notes that on Monday stocks fell to a more than three-month low and the naira.