UPDATE 1-Nigeria central bank to resume FX sales as lockdown eases

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By Alexis Akwagyiram
LAGOS, April 29 (Reuters) - Nigeria's central bank said on
Wednesday it has resumed dollar sales to commercial banks in
view of the gradual easing of the coronavirus lockdown.
The bank said in a statement it would sell $100 million per
week to help individuals with dollar expenses abroad such as
payment for foreign schools fees 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, traders said. Importers with past due obligations are
scrambling for hard currency while providers of foreign exchange
such as offshore investors have exited.
Nigerian President Muhammadu Buhari locked down Lagos and
Abuja as well as Ogun states last month to curb the spread of
the novel coronavirus, prompting the central bank to run greatly
reduced operations while currency traders worked from home.
On Monday Buhari said that lockdowns in these states would
gradually ease from May 4. Nigeria has so far reported 1,532 cases of the coronavirus
and 44 deaths.
The central bank said it has made plans to resume foreign
exchange sales to bureau de changes as soon as international
travel resumes and warned against currency speculation which
could lead to a spike in exchange rates.
The naira has been hitting new lows on the over-the-counter
spot and black markets after the central bank last month
devalued the currency and suspended dollar sales to retail
currency traders due to COVID-19 restrictions.
The currency hit a new low of 460 per dollar on the black
market on Tuesday as dollar scarcity worsened. Investors have
questioned the central banks' ability to defend the currency in
the face of dwindling dollar reserves and an oil price crash.
Equities have paused a sell-off triggered as foreign
investors who sought to exit Nigeria got stuck owing to a lack
of dollars. Analysts expect the sell-off to resume as soon as
dollars become available.
On Tuesday, the IMF approved $3.4 billion in emergency
financial assistance for Nigeria to support its response to the
pandemic. This week, the central bank opened up the clearing house for
cheques across the country as part of easing the
lockdown. (Writing by Chijioke Ohuocha; Editing by Toby Chopra and
Jonathan Oatis)