The naira has further depreciated in the black market, now trading for N710 to the dollar on the Aboki Forex exchange website.
According to data from Aboki Forex, the national currency, which on Monday was trading for N670 versus the dollar, has dropped even more since then, down 6.7 percent in just two days as of Friday afternoon.
The Central Bank of Nigeria (CBN) banned the sale of foreign currency to bureau de change operators a year prior to today’s record decline.
Due to their illicit sales of foreign exchange above the market they were authorized to serve, the BDC operators’ purchase of foreign currency had previously been restricted by the central bank.
BDC operators were a significant part of the black market before the prohibition, helping people who couldn’t legally get foreign currencies directly from the CBN to maintain their conversion rates.
The country’s economy was severely harmed by the restriction of BDC operators’ access to the CBN as a source of foreign money by increasing pressure on the national currency.
The currency exchange rate was approximately N501 to a dollar when CBN Governor Godwin Emefiele forbade the sale of foreign currencies to BDC. However, the value of the naira fell to N670 to the dollar a year following the prohibition.
The top bank threatened to detain and prosecute Nigerians last week who were using naira to purchase dollars in an effort to further restrict the flow of foreign exchange at the parallel market.
“For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that,” Mr Emefiele said at a Monetary Policy Committee (MPC) meeting in Lagos.
However, Mr. Emefiele has come under fire for neglecting to implement measures that would have helped to stabilize the value of the nation’s currency on the foreign exchange market.
Since Godwin Emefiele took over as governor of the central bank in March 2014, the value of the naira versus the dollar at the Investors and Exporters window has dropped from N164 to N430 on Wednesday.
The Naira dropped from N180 to the dollar in 2014 to N710 on Wednesday in the parallel market.