Naira Crashes to N420 to Dollar over COVID-19

The Naira exchanged between N405 and N420 to the dollar yesterday as panic buying by foreign currency traders triggered another round of depreciation of the local currency.

Also at the Investors & Exporters (I&E) window, the exchange rate jumped to N368.33 per dollar from N366.75, losing N1.58, the biggest daily depreciation since 2017, when the window was introduced.

Market operators said the development was triggered by sudden jump in dollar demand as many currency traders anticipate foreign exchange scarcity due to low inflow from crude oil sales in the wake of the Coronavirus outbreak across the world.

These, they believe, would lead to eventual devaluation of the naira by the Central Bank of Nigeria as it did in 2015.

Aminu Gwadabe, president, Association of Bureaux De Change Operators of Nigeria (ABCON) said the crude oil price which fell drastically in the international market to as low as $35 per barrel, raised speculations among the BDC operators and Nigerians in general.

He said this caused speculations in the market which were not necessary.

Gwadabe said, “With the fall in oil crude oil prices on Monday, we witnessed a lot of foreign investors portfolio dropping their assets, most especially to convert to cash.

“The movement was as a result of recklessness on the side of the operators, when they want to speculate, but there is no reason for such because the Central Bank of Nigeria had continued to maintain support for liquidity to the BDC sub-sector.”