Revealed: The real reason of naira crash on parallel market
– CBN measures caused naira crash
– Naira rates on the parallel market may fall again because of speculators
Guardian reports that the recent crash of naira on a parallel market was caused by the tactics of the Central Bank of Nigeria (CBN).
It’s considered that the apex bank, in a bid to calm down the naira, rolled out a “test-run” of procedures which hit negative speculators embarrassingly in the solar plexus.
The insiders in the bank said that the positioning of a number of measures by the organization had confirmed that turning the tide in the forex market is not intolerable, particularly with the “severe punishment suffered by currency hoarders and speculators” on February 24.
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The naira’s exchange rate to the dollar had on Wednesday assumed multiple pricing trend at different centres across Nigeria, with the lowest price at N220 to the dollar, while the highest was N300.
“Some parallel market operators revealed that they bought from sellers at the rate of N272 and sold at N295. A good number of the sellers who had suffered huge losses confessed that they had bought at the rate of N380 hoping to sell at N400 before the sudden turn in fortunes,” he said.
The CBN had said that entrepreneurs were behind the market gurgle, which made a mince-meat of the currency, causing its crash it crashing to an all-time low of N400 against one dollar.
The source added that even though the rates on the black market may fall again as speculators may continue, they will only be “gambling” with what is left of Wednesday’s loss, which they will finally lose with further “strike” from the plans.
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On February 20 President Buhari hardened his stance against devaluing the Nigerian currency because he considers devaluation will not help the country “as it had few exports apart from oil and depended on imports whose cost would rise with such a move.”
The naira appreciated to an all-time low of about N400 to a dollar on the parallel market fuelling concerns that it would plummet further to N450-N500/$ this week.
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