By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)-Nigeria on Thursday shut down the interbank market for the second consecutive day as the naira continued to crumble due to falling oil prices, postponement of Feb. 14 elections and an Islamist insurgency.

A Reuters report said shortly after triggering a self-imposed ‘circuit-breaker’ agreed among themselves last month, dealers said the central bank was ringing round trying to gauge their appetite for dollars in what is turning into a full-scale currency rout.

The report says amid the confusion, the naira was quoted at a new record low of 206.60 to the dollar, extending its slide since the start of November to nearly 25 percent.

According to the report, the decline in Nigeria’s local currency piles even more pressure on Godwin Emefiele, central bank governor to devalue the currency for the second time in three (3) months.

Analysts say looming elections – a February 14 vote has been postponed to March 28, ostensibly due to security concerns – are putting him in an impossible decision. “So far, his main weapons to defend the currency have been to spend foreign reserves or tighten naira liquidity,” the reported said.

Naira derivatives betting on the future level of the currency point to it collapsing to around 280 to the dollar in a year’s time.

At the end of November 2014, the Central Bank of Nigeria (CBN) officially devalued to 160-176 to the dollar, but the naira immediately weakened beyond that range.

The report further affirmed that the decline of the naira has accelerated over the last week as concerns have grown about a prolonged political stalemate or constitutional crisis in Nigeria.

“In another worrying sign for the government, which is already facing a funding crisis due to the decline in oil revenues, a domestic bond auction failed to reach its target, selling only 76.5 billion naira, rather than the intended 90 billion,” the report added.