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Nigeria naira firms on black market after central bank resumes FX sales

Published 05/05/2020, 12:09
Updated 05/05/2020, 12:12
© Reuters.

By Chijioke Ohuocha
ABUJA, May 5 (Reuters) - The Nigerian naira firmed around
6.5% on the black market on Tuesday from a week ago after the
central bank resumed U.S. dollar sales to commercial lenders
following this week's gradual easing of the coronavirus
lockdown, traders said.
The currency rose to 430 per dollar on the unofficial market
patronised mostly by individuals with dollar expenses abroad.
The currency had hit 460 last week, its weakest in three years
as dollar shortages gripped the market. The central bank said it would sell $100 million per week to
help individuals meet foreign school fees obligations and small
businesses wishing to make essential imports needed to revamp
economic activities. Dollar demand has been swelling and piling up pressure on
the naira. Importers with past due obligations have been
scrambling for hard currency while providers of foreign exchange
such as offshore investors have exited.
The naira had been hitting new lows on the black and
over-the-counter spot markets since March after the central bank
adjusted its official rate, implying a 15% devaluation. An oil
price crash last month also worsened dollar shortages.
Though the black market naira firmed on Tuesday, it remains
16% weaker than the official market rate of 360. The currency
traded at 387.35 per dollar on the spot market widely quoted by
foreign investors and exporters.

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