Naira depreciates greatly as panic grips forex market

Indications emerged that Nigeria’s foreign exchange market has come under severe pressure leading to significant depreciation of the local currency, Naira, across all market segments.

This comes as the Central Bank of Nigeria, CBN, indicated that it would raise about N513 billion from sales of Nigerian Treasury Bills, NTB, in the second quarter of 2020.

Yesterday the naira suffered its biggest daily depreciation of N8.5 against the USdollar in the parallel market since 2017, as the exchange rate rose sharply to N367 per dollar from N358.5.

At the Investors & Exporters (I&E) window, the exchange rate jumped to N368.33 per dollar from N366.75, losing N1.58, the biggest daily depreciation since 2017, when the window was introduced.

Market operators said the development has been triggered by sudden jump in dollar demand as many traders and anticipate foreign exchange scarcity expected to arise from crash in oil price which will mean huge drop in foreign exchange inflow to the economy amidst persistent fall in the nation’s external reserves. These, they believe, would lead to eventual devaluation of the naira.

– Vanguard