The Naira dropped against the United States dollar from 498 to 500 at the parallel market during the early trading hours on Monday, crossing the critical threshold currency analysts had predicted.
Foreign exchange traders linked the development to relative scarcity of the greenback in the forex market.
The naira is expected to remain at 498/dollar at the parallel market as the Central Bank of Nigeria continues sales of the greenback to Bureau De Change operators.
However,“Confidence is gradually returning to the forex market as a result of improved foreign exchange reserves, dollar sales by international money transfer agents and the central bank assurance it will continue to support the local currency,” one trader told Reuters.
“If the CBN did take a plunge to make it really market-driven, we can see that even the 400/dollar rate may appreciate later on, bringing to something below 400/dollar,” the expert said.
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