Nigeria’s currency is seen falling in the black market in the coming week, after touching its lowest levels against the American dollar in 36 months, due to plunging oil prices in recent weeks and thin liquidity in the OTC (Over the Counter) spot and black market.
The naira dropped from N420 to N425 on the black market today, as since last month, the Central Bank had stopped selling foreign exchange currencies to Bureau de Change dealers, which heightened the clampdown on currency speculators.
The lockdown of Nigeria’s major cities, in the bid to reduce the impact of COVID-19 onslaught, has weakened economic productivity and money markets, as most bank traders and currency analysts have suspended trading. This is also coupled with the recorded low levels in crude oil price, selling below the adjusted benchmark ($30) on Nigeria’s 2020 budget.
The naira has also been dropping at low levels at the over-the-counter spot markets on thin liquidity since March after the Central Bank devalued the naira implying a 15% devaluation. It last traded at N387.54 to $1 on the spot market.
