The naira sustained its downward trend against the United States dollar on Monday as it weakened to an all-time low on the parallel market where it sold at N1,100 per dollar.
This was far lower than the N1,060/$1 it traded on Thursday.
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But the nation’s currency traded lower at N1,130 to a dollar for those that demanded wired transfer.
Similarly, on the official Investors and Exporters’ (I&E) window, the naira fell to N883.56/$ yesterday, according to the Central Bank of Nigeria’s data, as against the N775.44/$ it sold the previous day.
The naira depreciation was attributed to persistent dollar shortages in the financial system, and being driven by new demands as import bills rose on 43 unbanned items recently by the Central Bank of Nigeria (CBN).
Also, data from the FMDQ showed that on the official I&E window, the total daily volume turnover yesterday was $69.88 million, which was a sharp decline by 48.04 percent compared to the $134.28 million recorded the previous day.
As of Monday, the gap between the parallel market and the I& E FX Window widened further to N216.44 to a dollar, creating more opportunities for arbitrage in the market.
Analysts pointed out that the development gives more naira to government officials, especially the state governors and could encourage reckless spending by some of the governors.
“We may see some state governors who, in the coming days, because of the excess naira they would get from federation allocation, indulge in reckless spending,” the analyst, who pleaded to remain anonymous, added.