The naira plunged to a new low of 414 against the United States dollar on Sunday amid the continued scarcity of foreign exchange in the country.
Currency experts have said even though the CBN continued to intervene by selling dollars daily on the interbank market, its efforts were inadequate and considered weak.
“There is nothing in the policy environment that will arrest the decline unless the central bank has increased capacity to supply the market, which unfortunately it doesn’t have. So, we should expect the naira to remain under pressure in the coming week,” said Mr. Johnson Chukwu, the Chief Executive Officer, Cowry Asset Management Limited.
Forex dealers said the demand pressure on the dollar, mounted by summer travellers and parents paying schools fees of their children studying overseas, was aggravated by the CBN’s forex ban on nine lenders last Wednesday.
The currency dealers said the naira started falling after the CBN banned the lenders from forex transactions.
A currency analyst at Ecobank, Mr. Kunle Ezun, said “A lot of people in the official market will want to actually maximise the gains on their dollar holding by channelling it through the parallel market.”
“Sincerely, there is no major thing that one can expect in the parallel market. The only thing that could bring calm to the market is the supply of the US dollar. What we have in the market is basically demand and supply interplay,” Ezun added.