The naira appears to have entered a free fall mode with the local currency selling for 516 per United States dollar on the streets of Lagos on Thursday.
The naira plummeted at the parallel market from 510/dollar on Wednesday to 516/dollar on Thursday.
Currency dealers on the streets of Lagos Island sold the greenback at 516 and bought same for 513.
In Egbeda, a major black market centre in Lagos, the naira was sold for 516 and bought at 510. At the Murtala Muhammed International Airport, Lagos, the dollar was bought on the parallel market for 516 and sold at 513.
On Wednesday, the local currency had closed at 507 against the greenback as acute dollar shortage continued to weigh on the currency market.
The local currency traded at 507/dollar on Monday and Tuesday on the black market.
Experts are divided over the outlook for the naira this year.
However, some analysts have predicted that the local currency will take further beating against the dollar this year.
Chief Executive Officer, Financial Derivatives Limited, Mr. Bismarck Rewane, said the local currency would hit 520/dollar this year on the parallel market and touch 350/dollar at the official market.
An economic expert, Mr. Henry Boyo, has predicted that the naira will hit 1000/dollar on the parallel market this year if the Central Bank of Nigeria fails to review its monetary policy framework.
According to him, current monetary policy framework adopted by the CBN is skewed against the naira.
Other experts including CEO of Afrinvest, a local research and investment advisory firm, Mr. Ike Chioke, says the naira will depreciate further against the dollar this year unless the CBN reforms the currency market.
Meanwhile, analysts have predicted that the naira will face fresh pressure on the parallel market next week with dollar supply falling short of demand by persons seeking currency to pay school fees abroad as the CBN continues to ration forex for businesses.
Demand for dollars has soared even though the external reserves have reached $29bn.
The naira continues to trade flat at the official interbank window at 305.5 to the dollar.
Traders said demand pressure was mounting on the black market but dollar supply had not significantly improved, suggesting further depreciation of the local currency might be coming, Reuters reported.