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By Chijioke Ohuocha
ABUJA, Aug 18 (Reuters) - Nigeria's naira fell 1.04% on
Tuesday to a low of 480 on the black market after the government
said it would reopen airports for international travel in two
weeks' time, a move that could increase dollar demand, traders
said.
The naira had been stable for over a week on the black
market at 475 per dollar, where it trades at more than 20%
weaker to the official over-the-counter spot market.
With the price of oil, Nigeria's main export, depressed and
foreign exchange reserves dwindling, its central bank is hanging
on to dollars to support the naira - leaving a shortage of hard
currency supply for investors and importers.
Currency markets anticipate an increase in demand with
airports having been closed since March 23 to all but essential
international flights as part of efforts to combat the COVID-19
pandemic. In March, the central bank suspended forex sales to retail
currency bureaus that resell hard currency to individual users
with medical bills and school fees abroad.
As international travel resumes from Aug. 29, traders
anticipate a surge in dollar demand, likely heightening pressure
on a currency that has been devalued twice so far, and
stretching the central bank's ability to defend the
naira.