Scarcity of dollars is making the Nigerian currency, the naira, plunge at both the interbank and parallel markets. On Friday, July 22, $1 equalled N330, as against N300 the previous day. Parallel market rates jumped to N379 for $1 on Friday evening, while the pound went for N500.
Reuters reports that the naira slipped to 298.50 per dollar on thin volumes at market open and extended losses to trade a total volume of $26.97 million on Friday afternoon in Lagos.
The Central Bank of Nigeria (CBN) intervened in the market to stem the slide of the naira, taking bids from primary dealers in order to help the naira.
The Economist, a London-based newspaper, wrote on Thursday: “The central bank’s policy of defending the naira has been disastrous, creating shortages of products such as milk and fuel and bringing factories to a standstill for want of imported inputs.
“The economy contracted by 0.4% in the first quarter of this year, thanks to cheap oil and monetary mismanagement. The IMF expects GDP to shrink 1.8% this year.”
— With agency reports