The naira plunged further against the United States dollar to a new record low of 490 on Thursday, down from 472 it recorded on Wednesday.
The currency had continued its two-week free fall on Monday, closing at 445 to the dollar after tumbling to 439 on Friday.
On Tuesday, the currency closed at 452 to the greenback. Also on Tuesday, the external reserves hit an 11-year low of $24.61bn.
“Dollar is very scarce in the market right now because many people don’t know how low it will fall in the near term, so people are holding on to their hard currencies in order to watch the direction of the market,” one dealer said.
The President, Association of Bureau De Change Operators, Aminu Gwadabe, told Reuters that forex traders from neighbouring countries and some importers had also been moving in recently, mopping up dollars and putting pressure on the naira in a possible speculative bid.
Chronic dollar shortage plunged the local currency to a wave of depreciation, which economic and financial analysts have linked to speculative attack on the naira and increased demand from companies and individuals.
After trading between 423 and 425 for several weeks, the naira plunged to 428 last Wednesday. This came a day after the Central Bank of Nigeria’s Monetary Policy Committee retained the lending rate at 14 per cent contrary to calls by the fiscal authority, economists and stakeholders.
Analysts have dismissed that recent declines had links to the MPC decision to retain the lending rate at the current rate.
However, at the interbank market on Thursday, the naira closed at 305.31 to the dollar, up from 312.99 on Wednesday.
Gwadabe said that the planned commencement of distribution of forex by Travelex could not hold due to some bottlenecks.
Travelex, an international money transfer organisation, ought to have begun the distribution forex to the BDC operators on Monday.
Its intervention was postponed to Wednesday, but again, it could not hold.
The ABCON leader had said the sale of forex to the BDC operators by Travelex would help to stem the tide of volatility in the exchange rate and subsequently close the huge gap between the official and parallel market rates.
He could not tell when Travelex would commence the sale of forex to the BDCs.
According to him, Travelex has the technology to sell forex to about 1,000 BDCs in a couple of hours, which is a major advantage.
He said the latest decline in the naira value was as a result of the activities of speculators.
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said, “The rising exchange rates we are seeing at the parallel market now are not realistic. They have to do with the activities of speculators.
“However, we cannot rule out the fact that there is an acute and chronic shortage of FX; there is a genuine demand that the supply cannot match simply because inflows have dropped significantly.”
Gwadabe said, “Several sharp practices have been going on in the forex market and these elements want to continue making profits from the status quo. This is why they are speculating against the naira.
“They are attacking the naira. This is why the fall in the value of the naira is partly caused by the activities of speculators.”