Nigeria’s national currency Naira plummeted in value against the US dollars, amid the collapse of global oil prices.
The central bank of Nigeria and President Muhammadu Buhari has already begun implementing various currency controls to avoid additional devaluation of the currency. Due to fear of hyper devaluation and extreme currency volatility, the country’s black market exchanges have seen an explosive demand of US dollars, leading to a surge in the value of USD.
Based on the data provided by Google Finance, the value of Nigerian naira fell to nearly US$0.05 for one naira, recording an all time low since early 2005.
In January 12, 2016, the black market rate for USD spiked to 282/USD according to financial blog Zerohedge, recording a staggering 29.4% increase in the value of US dollars.
“Without the CBN’s support, it is unclear who will fund BDCs and to what extent. Ultimately, we think these measure are precursor to a devaluation of the interbank FX rate – which we think is the only way to address the large and growing premium for USD on the black market,” said Alan Cameron, an economist