There’s a panic in the Nigerian market following a scarcity of dollars which came after market speculators began stocking up their dollar reserves.
At the beginning of the year, the Naira traded at N360 to a dollar. However following the crash in oil price, the naira is now trading at N375 to a dollar in Lagos and between N370 and N372 in Abuja.
Nigeria’s Eurobonds due 2047 dropped for the sixth straight day on Wednesday March 11 according to Bloomberg, pushing investors into dumping the notes over fears of a naira devaluation after global oil prices plunged this week.
Yields on the dollar securities jumped 28 basis points to 10.4% with currency speculators now betting that the central bank of Africa’s top oil producer will be forced to allow the naira to weaken.
While traders told The Cable that they are waiting for the Central Bank of Nigeria (CBN) weekly intervention of up to $210 million into the forex market to support the naira, the apex bank’s Governor, Godwin Emefiele on Wednesday announced that they will protect the economy from the negative fall out of the sudden drop in oil prices.
Ainu Gwadabe, President of Bureau de Change Operators of Nigeria in Lagos said;
“The fall in oil markets is a cause for panic in the foreign exchange market.
“The situation has created unhealthy economic behavior like hoarding and speculation.”
Some Twitter users have also advised Nigerians to buy and stock up dollars as the exchange rate might go high.
Here are some tweets below;