The Nigerian Naira on Friday fell to its lowest level in over four years at the parallel market to N502 to $1, crossing the 500 mark. The Naira also depreciated against the Pound sterling and Euro, at N701 and 608, respectively. This comes two weeks after the Central Bank of Nigeria (CBN) devalued the currency in an effort to ease the naira against foreign currencies.
According to the Investors and Exporters FX window (I&E FX Window), naira gained slightly against the dollar, closing at N410.75, indicating a 0.04 percent appreciation compared to the N410.90 it traded on Thursday.
Managing Director/CEO Financial Derivatives Company Limited, Bismarck Rewane attributed the naira’s depreciation to panic buying by forex users, saying “Our economic analysis based on the cobweb theorem of prices (exchange rate) moving towards an equilibrium says that prices will rise initially when there is a demand gap before falling in the short run.
“Therefore, we expect the forex market to correct itself in July with the naira appreciating towards N470-N490/$,” he said in an emailed report to investors.