Naira crashed to as low as N910/$, yesterday, at the parallel market as the market switched to a panic mood. With the local currency breaking the N900/$ psychological ceilings, there are fresh concerns that the troubled currency is still far from bottoming out and that it could hit N1000/$ mark in the coming weeks.
Naira held tightly around N750 $ three weeks into the market liberalisation at the unofficial market even as the worrisome wide market arbitrage cancelled out.
But the market sentiment changed in the past three weeks as the currency began a free fall.
First, it plunged to N800/$ and started a gradual depreciation that took the value down to N880/$ last week.
Yesterday, the buying and selling offers ranged between N900/$ and N915/$ in Lagos.
It was gathered that, also informed that most black market dwellers have run out of supply amidst extremely volatile trading conditions.
On peer-to-peer (P2P) platforms such as the popular Binance Exchange, dollar traded at N900 earlier in the day but spiked to N923 at press time.
Interestingly, the value of naira remained stable at the official Investors’ and Exporters’ (I&E) window where it has traded between N750 and N800 in the past week.
Yesterday’s trading session opened at N782.38/$ and closed at N782.59/$.
The premium on the black market, which fell to near zero days after the rates convergence, widened to N128 per dollar or 16 per cent as at yesterday’s evening.
Whereas the spread is relatively low compared to last year when it rose to 100 per cent, its current level is wide of the recommended five per cent.
The International Monetary Fund (IMF) says above five per cent arbitrage is cause for concern as it triggers roundtrip transactions, which the Nigerian market is known for.