Godwin Emefiele, CBN governor

Forex traders in Lagos said today that the Nigerian Naira was so battered that it sold for as low as N198.60 to a US dollar.

By midday, the exchange rate was N194 to a dollar.

The worsening rate appears unaffected by the efforts by the Central Bank to curtail currency speculations as it decreed overnight that dollars bought from the interbank market can be held only for up to 48 hours.

After the 48-hour interval has elapsed, the dollars must be sold back to the central bank at its own day rate, according to a circular seen by Reuters, which is likely to result in a loss.

The naira closed up 1.5 percent at 182.20 to the dollar in limited trade in inter-bank. But outside, it’s panic, as people who need the Greenback to pay school fees and order for goods rushed to buy.

“There is no major trading going on now at the interbank, as a result of the new rules. Most people are merely giving an indicative rate,” one dealer said.

The naira has been hit hard in the past few months by falling oil prices, and central bank Governor Godwin Emefiele told Reuters on Thursday that “we do not want speculators in this market any longer.”

He was explaining a move made overnight to ban banks from holding any of their own funds in dollars.

Within minutes, dealers sent the naira to a record low of 188.85 against the greenback, before it recovered marginally on the back of a central bank intervention.

Despite assurances from Emefiele that “if there is genuine demand … for dollars for legitimate purposes … it will be met,” dealers complained the bank’s restrictive measures were making the market extremely illiquid