The Naira Crashes To 230 For 1 Dollar

The naira continuous to suffer a serious pressure as well as Nigeria’s economy in general. On Wednesday at the parallel market the naira crashed to 230 against the United States dollar after the central bank banned importers from using the foreign-exchange market for some goods about 10 days ago. In the past one week the naira had fallen to 220, 223, 226.5 and 228 against the dollar. According to The Punch, black market operators say that serious dollar liquidity squeeze was already hitting the market and operators were no longer in possession of huge stock of forex to meet rising demands, especially from the importers of the banned items. The head of a BDC, Harrison Owohsay said: “The situation is getting critical now. There is serious dollar liquidity squeeze in the market now. The demand is overwhelming and both the black market and the BDC segment can no longer meet the demand. The market is very volatile now as a result of the restrictions placed on about 41 items by the central bank. Most importers are now patronising the parallel market to source their dollars”. The source also states that some analysts believe the naira may hit 240 against the dollar in the coming days while the central bank had lowered its exchange rate peg to N196.95 to the dollar on Tuesday.