By Dipo Olowookere
The value of the Dollar to the Naira crashed at the black market on Wednesday to N800/$1, Business Post reports.
This was caused by panic selling from some customers who had earlier hoarded the foreign currency in anticipation that the local currency would continue to weaken in the foreign exchange (FX) market.
It was observed that most forex hawkers in Lagos were reluctant to buy the Dollars from their customers because they are not certain if the value would further move downward.
In the previous trading session, the Naira was exchanged to a Dollar at the parallel market at N940$1 until it (domestic currency) was strengthened by N140 to N800/$1 on Wednesday afternoon.
Also, in the peer-to-peer (P2P) segment of the FX market, the Naira quickly gained N64 against the greenback this afternoon to sell at N860/$1 compared with the N924/$1 it was traded yesterday.
Recall that on Monday, the acting Governor of the Central Bank of Nigeria (CBN), Mr Folashodun Shonubi, warned that speculators would regret mopping up Dollars from the market to put pressure on the Naira.
He said the exchange rate of the parallel market was not being “driven by pure economic demand and supply but are topped by speculative demand from people,” noting that his team would move quickly to save the local currency from its woes.
This may have triggered the panic selling of Dollars as a few FX traders at the Olugbede Model Market informed this newspaper they were being careful with the “sudden” inflow of Dollars into the market today.
Adedapo Adesanya