Naira in all time low of 365 per dollar.

The naira traded at an all-time low of 365.25 to the dollar on Thursday in a single interbank market trade of $1m, Thomson Reuters data showed.

Interbank trading started two hours after the market opened and offered the currency sharply lower against the dollar. A total of $13m had been traded by 1235 GMT.

The naira plunged to a record low and forwards rose, suggesting traders expect further depreciation, as the economy struggles amid a dearth of dollars.

Three-month non-deliverable forward contracts climbed by 4.1 per cent to 364.5 against the greenback, Bloomberg reported.

Contracts maturing in a year rose by 3.5 per cent to 403, also a record.

The local currency has slumped by 38 per cent since the Central Bank of Nigeria ended a 16-month peg of 197-199 per dollar on June 20.

The capital controls needed to defend the fix sent foreign investors fleeing and took the economy to the brink of recession.

The International Monetary Fund forecasts a 1.8 per cent contraction of the economy this year.

“There’s still a lot of demand for dollars,” Craig Thompson of Nyon, Switzerland-based brokerage Continental Capital Partners SA, said in a telephone interview.

“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.

Local banks are unable to meet much of the demand for dollars, forcing their customers to the black market.

The naira trades at 394 per dollar at the parallel market, around 11 per cent weaker than the official rate.

“There is no liquidity” in the interbank foreign-exchange market, an analyst at Ecobank Transnational Incorporated, Kunle Ezun, said.

He said the CBN sold dollars on August 15 and 16 and would continue intervening.

“They won’t want to see this jump,” Ezun said. “They will come in, maybe tomorrow, to bring it down to 320 or 330.”