The development came five days after the Central Bank of Nigeria had banned nine commercial banks from the forex market for failing to remit the Nigerian National Petroleum Corporation’s $2.334bn into the Treasury Single Account in line with President Muhammadu Buhari’s directive last September.
The naira was sold for 414/dollar across some black market segments in Lagos and Abuja on Sunday. It hit an all-time low of 412 against the greenback at the parallel market on Friday, after closing at 409/dollar on Thursday.
On Wednesday, a day after the CBN banned the nine banks from the forex market, the local currency depreciated to 402/dollar, down from the 397 it closed against the greenback on Tuesday.
Forex dealers said the demand pressure on the dollar, mounted by summer travellers and parents paying schools fees of their children studying overseas, was exacerbated by the CBN’s forex ban on the nine lenders.
The currency dealers said the naira started falling after the CBN banned the lenders from forex transactions.
The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said,“The decline of the naira against the dollar is beyond the recent suspension of some banks from the forex market. We have witnessed suspension of banks in the past, and it did not lead to any spike in exchange rate. The major challenge we have now is supply shortage. If that improves, naira will stabilise.”
He said the naira might hit a low of 420 to the dollar this week.