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Naira Unexpectedly Crashes Further

The Nigerian Naira on Thursday March 2 crashed against the American Dollar, Pound Sterling and Euro at the parallel market.

According to reports, the local currency has crashed to N458 per dollar as against the N455 it closed on Wednesday March 1. The Naira also weakened to N540 against the pound from the previous rate of N535 and to N475 against the Euro.

Just last week, the value of the Naira recorded the highest and fastest gain of 11.9 per cent in four days at the parallel market, in over three years.

This follows the Central Bank of Nigeria (CBN) decision to sell a total of $372.4 million to ease the pressure on the local currency.

Financial experts had predicted that the local currency will continue to appreciate if the status quo was maintained.

On its part, the CBN said the recent appreciation of the Naira against other currencies was the result of its market monitoring and intervention. Its spokesman Isaac Okorafor refuted the claim that illegal sale of foreign currencies at ridiculous rates was responsible for the change in Forex policy.

Okorafor, who spoke in Sokoto, also explained that the appreciation of the Naira was in no way connected to the allegations of illegal sale of foreign currencies.

“What led to the appreciation of the Naira was that the CBN did intelligence on the market and realised that what was driving the demand on the Bureau De Change (BDCs) and parallel market was speculation.

“We reasoned that since there is a lot of pressure on the two segments from people seeking to buy foreign currencies for BTA, tuition and medicals, that if we successfully addressed that, the pressure will come down.

“Also, before now, the level of our reserves was not enough to make us comfortable enough to really do the kind of intervention that is required.

“We decided to do so now because we are a bit more comfortable with our level of reserve,” he said.

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