The naira yesterday tumbled to new low of N480 to dollar on the parallel market as dollar shortage persisted.
The local currency was exchanging at N476 to dollar in the morning hours, but weakened and closed at N480 to dollar in the last trading sessions of yesterday.
The continuous decline in the value of the naira has been fueled by dollar scarcity and other unfavourable economic variables including the rise in import bill.
“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.
Speaking on the development, President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said 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.
Other analysts said the underlying weak global demand of crude oil impacted adversely on the economy, especially through diminishing oil export earnings. The prices of crude oil fell by nearly 60 per cent from $114 per barrel in June 2014 to about $48 per barrel at present. These resulted in a dwindling of Nigeria’s overall economic fortunes, as net inflows tapered and pressures escalated in critical financial markets.
The Central Bank of Nigeria (CBN) also witnessed a significant decline in foreign exchange reserves from about $42.8 billion in January 2014 to about $24.7 billion at present.