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The naira plunged by 31 per cent to 288.85 against the United States dollar on Monday at the close of trading at the newly established interbank market, Punch reports.
The local currency also depreciated at the parallel market where it closed at 346 to the greenback, down from around 330 and 335 on Friday.
The Central Bank of Nigeria had last week introduced new guidelines for the nation’s foreign exchange market with the adoption of a single structure through the interbank/autonomous window.
The naira, which was pegged at 197-199 per dollar before the emergence of the new forex policy, closed at 288.85 to the dollar on Monday, with the forces of demand and supply coming to play to determine the value of the nation’s currency after the CBN allowed it to float freely.
Meanwhile a report by Vanguard revealed that the naira appreciated in the parallel market to N340 per dollar, due to panic selling which boosted supply of dollars into the market.
According to a BDC operator who spoke to Vanguard on condition of anonymity, “a lot of dollars came into the market today from people selling their dollars out of panic, because of uncertainty of how the new policy will affect the exchange rate in the parallel market.
In a bid to exploit the situation, BDCs offered lower bid (buy) rates, some as low as N310 per dollar.”
Investigations, however, reveal that though BDCs reduced their bid rates in order to buy cheap, they still quoted selling rates as high as N350 in some segments of the market.
