Naira plummets to 250/$1 as reserves fall again

The Nigerian naira fell to 250 to a dollar on Monday, with the nation’s foreign reserves dwindling further to a new low.

The naira which traded for 247 on Thursday, hit its highest ever on Friday, when it fell to 251 to the greenback.

The local currency is however trading within 249 and 250 on the parallel market across the nation.

“We are still selling at N249 to a dollar,” a trader told TheCable in Lagos.

According to the Central Bank of Nigeria’s (CBN) figures, the reserves fell to $29.80bn from $30.29, just about two weeks ago.

The apex bank had initially employed a plan of selling dollars to bureau de change (BDC) operators to keep a close gap between the official and unofficial price of the naira.

The attempt seems to have failed, with the official price still at 198, N52 away from the black market pricing.

The CBN suspended trading of dollars to parallel market operators, who they said could not provide appropriate documents for trading.

According to Aminu Gwadabe, the president of the BDC operators, more than half of those operating on the parallel market were denied dollars, until their documents are in order.

Economists and financial analysts, home and abroad, have called on the CBN to devalue the naira to allow for appropriate pricing and prevalence of market forces, but the bank has turned down such calls.

President Muhammadu Buhari and Godwin Emefiele, governor of the central bank have insisted that the naira would not be further devalued.

Analysts believe Nigeria would be forced to devalue as crude oil prices – the country’s main source of foreign exchange – are expected to fall to new lows in 2016.