The Nigerian Naira traded at a record low on Thursday in a single interbank market trade of $1m, according to Thomson Reuters data.
The local currency traded at 365.25 to a dollar, with about $13m exchange reportedly carried out by 12:35 GMT.
Traders and experts expect the Naira to plunge further considering the present economic situation in the country, and drop in the volume of oil production needed to breach the gap created by the lack of forex.
Three-month non-deliverable forward contracts rose 4.1 per cent to 364.5 against the US dollar, while contracts maturing in a year climbed 3.5 percent to 403.
The Naira has slumped 38 percent since June 20, when the Central Bank of Nigeria ended a 16 month fix rate of 197-199 a dollar.
Since then the local currency has plummeted as foreign investors that were expected to offset the current deficit created by lack of liquidity flee, after the United Kingdom left the European Union – pushing global risks and uncertainties to the recession era.
Last month, the International Monetary Fund forecast a 1.8 percent contraction of the Nigerian economy this year, after the activities of the militants distorted oil production.
“There’s still a lot of demand for dollars,” said Craig Thompson of Nyon, a Switzerland-based brokerage Continental Capital Partners SA.
“The central bank has been supplying them. They sold some at 309 on Wednesday to keep the rate down. They’ve been selling dollars most days to keep it going above 320 and have done their best to try and keep it closing around 310. Managing the exchange rate is difficult because there’s pent-up demand,” he added.
Commercial banks are unable to meet surge in demand for the greenback, forcing customers to the black market.
Currently, the Naira is trading at 394 per dollar at the parallel market, about 11 percent lower than the official rate.
“There is no liquidity” in the interbank foreign-exchange market, an analyst at Ecobank Transnational Incorporated, Kunle Ezun, said.
“They won’t want to see this jump,” Ezun said. “They will come in, maybe tomorrow, to bring it down to 320 or 330.”