The naira fell to a new low of 414 against the United States dollar on Sunday amid the continued scarcity of foreign exchange in the country, with economic experts predicting further pressure in the forex market this week.
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.
It first touched 400/dollar at the black market this month since the CBN floated the currency on the official interbank market in June.
At the interbank market, the naira closed at 314.95 on Friday, with traders saying interbank rates would ease this week when part of July’s budget allocation must have entered the banking system.
But experts said the naira would plunge further against the US dollar this week at the parallel market as forex supply remained a major challenge.