Naira sells for N402/US$ at parallel market

Barely 24 hours after news broke that nine banks are withholding $2.1 billion belonging to Nigerian National Petroleum Corporation (NNPC), naira fell to an all-time low of 402 units to the United States dollar.

This according to traders, was even weaker than 397 it traded on Tuesday previous session as dollar shortages gripped the official market.

The naira, which hit fresh record low since the central bank floated the currency on the official interbank market in June, first touched 400 on the black market this month.

On the interbank market on Wednesday, no trades were posted until three minutes before the end of the session, when the central bank which has been reducing its dollar sales, intervened, traders said.

Only three deals worth $0.75 million were traded at 305.50 per dollar, a level the market has closed at since Monday.

The currency hit an all-time low of 365.25 per dollar on the interbank on Thursday.

On Tuesday, news broke that nine banks have been suspended from foreign currency trading for not paying money owed to the government, a central bank source has told the BBC.

An official at one of the affected banks told the Reuters news agency the non-payment reflected the “dire macroeconomic situation”, rather than deliberate non-compliance.

Nigeria has suffered severe economic problems because of the relatively low price of oil, which provides most of the country’s foreign currency earnings.

The ban will be lifted individually as each bank transfers the money it owes. Each institution is also likely to face a further fine.

The forex trading ban was triggered after the Nigerian National Petroleum Corporation (NNPC) complained to President Buhari about the missing money, an NNPC spokesman told the BBC.