Naira crashes further to $/420 at the parallel market

Nigeria’s naira hits new record low of 420 per dollar on black market as Nigeria’s foreign exchange reserves fell to $25.45 billion by Aug. 29, down 2.86 percent

from the previous month.

Central bank latest data showed on Wednesday as the bank stepped up support for its ailing currency that Dollar reserves of Africa’s largest economy stood at $26.20 billion in end of July. The central bank data showed reserves had declined 18.9 percent from a year ago.

However, the naira hit a fresh all-time low of 420 per dollar on the black market on chronic dollar shortages on Wednesday, same day Africa’s most populous nation officially slid into a recession.

LAGOS PARALLEL MARKET RATES FOR NAIRA on 31/08/16

USD 420: GBP: 535: EURO: 461

The naira closed at 306 to the dollar on the official window after the central bank dollar sales, reversing losses in early traded which saw it quoted at 317.09 to the dollar, but fell compared with the 305.50 naira closed the previous day.

But bureaux de change operators raised hope of a gradual appreciation of the local currency in the near term as the central bank licensed 11 new international money transfer operators to address the dollar supply side.

“Depending on the effective implementation of the central bank’s policy, the appointment of new international money transfer operators will ensure that banks will have more dollar to sell to bureaux de change and provide the needed liquidity in the market,” Aminu Gwadabe president of bureaux de change association said.

Gwadabe said the central bank’s directive that commercial lenders should sell dollar inflow through money transfer operators to bureaux de change has boosted daily dollar supply to the currencies agencies to around $10-$20 million and this could further boost supply and help support the naira.

The Nigerian Bureau of Statistics (NBS) said on Wednesday that gross domestic product (GDP) contracted by 2.06 percent after shrinking 0.36 in the first quarter

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