Naira plunged to a record low on Monday after exchanging at N1,534.39 to a dollar at the official market segment.
According to data published on the FMDQ website, the local currency moved to an intraday high of N1000/$1 and a low of N1,550 to a dollar before it eventually settled at N1,534.39 at the close of business on Monday.
The rate implies a 4.38 per cent depreciation from the previous market sales on Friday last week.
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On Monday, forex turnover at the authorised market stood at $89.61 million amidst increased demand and inflationary pressure across sectors of the country’s economy.
However, the dollar was exchanged at N1,489/$1 and above across parallel markets in the country as against N1,488 recorded in the previous session last Friday.
Based on this, it is the first time in months the naira will trade at a significantly lower rate at the official market than that of the unofficial market.
Financial experts suggest this could affect the rate at which individuals source dollars from the black market since they can get a better rate at the official window.
In a recent analysis of the naira following its continuous depreciation, Bismarck Rewane, Financial Derivative Executive Director, explained that the naira is depreciating due to low forex supply, and loss of confidence as a store of value.
The financial expert listed other factors causing the fall of the domestic currency including increased naira speculation and fear, restrictions and exchange rate control, as well as negative real interest rates.
