Naira at lowest since pre-independence @ N570/$1, analysts expect N1000/$1 soon 

More than 107 years after Nigeria was stitched into existence by the British colonialists, her legal tender (Naira) has depreciated beyond the imagination of investors and stakeholders after it crashed to a historic low of N570 to a dollar in the parallel FX market in the closing hours of Thursday ahead of anticipated announcements, if any, from the apex bank on Friday pertaining on the beleaguered currency.

This, according to several analysts concerned about the situation, could be the resulting impact of the Central Bank of Nigeria’s (CBN) decision to stop dollar sales to BDCs.  Although, the apex bank has notably intensified efforts to combat “dollarisation” in the country through various notices and circulars prohibiting several government agencies, departments from receiving payments in foreign currency as well as directing microfinance banks to desist from forex transactions.

The situation has forced some analysts out of the woodworks with some projecting the rate was on its way to N1000 per dollar, given that the exchange rate decline was higher than had been anticipated.

One analyst was projecting Friday morning that the rate will hit N900 to the greenback in street trading by February 2022 or earlier.

“It is sad… the rate of decline is higher than anticipated. A key player told me to expect N900 by Feb 2022 or earlier or Easter at the latest. The higher rate of decline will attract more sellers and the rate of decline accelerates even more and goes through the roof. The next couple of months are scary. I still believe it’s the Naira collapse that will trigger the ultimate meltdown.

“Much as we would love to do something, my personal take is that the macro forces are now in play and there’s very little individual forces can do, except for those individuals still with some semblance of “power” – whatever hue that may take. I think the trigger point will be around the N1000 per dollar mark and the CBN will be overwhelmed.

“The tsunami will now move towards other nodes of the system and they will be overwhelmed one after the other. I hate to say this, but it looks like our worst fears may be about to be realised. I pray I’m off target with these probable model outcomes,” a UK based analyst speculated.

In a related development, the Central Bank of Nigeria in its reaction to the low-flying Naira across the parallel market, on Thursday began its investigation into seven accounts owned by Oniwinde Adedotun, the founder of AbokiFX Limited, a web platform that reports daily movements in the foreign exchange market since 2014.

Sources within the CBN disclosed that the founder has allegedly been involved in some ‘foreign exchange transactions’ which were found in his accounts and that these are now subject of an investigation. This further has led to the apex bank directing commercial banks to freeze the accounts owned by Adedotun until the investigations between 2019 till 2021 are concluded.