In another sign of the time the naira fell on Wednesday to an all-time low of 334.50 against the dollar on the interbank market on Wednesday.
According to Reuters, the naira fell 5.8% on Wednesday from its opening rate, and $10 million was traded at the new record low.
The report also claims rather shockingly that traders said investors were pushing the currency lower to test the limit of how far it can fall, given a spread of almost 12 percent between the official and black market naira rates.
“If we have more people trying to buy the naira then it should strengthen. I think we will keep seeing the trickles … I don’t think we will see large inflows until the fundamentals of the economy improves,” one trader said.
So as we can see your exchange rate is undergoing a massive experiment which economists refer to as a period of price discovery. One silver lining in all of this is that we can now confidently say that the Naira is fully floating.
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The official market will have to converge with the parallel market for we to see some stability. We expect the volatility to stop once we have a black market rate that is not more than 5% higher than interbank rate.