Nigeria’s Naira on a Free Fail, Now N499 to $1
Nigeria’s naira was quoted as low as 499 to the dollar on the black market on Tuesday, 39 percent weaker than on the official market, where the central bank has been selling the greenback to support the local currency.
On the official market, the naira was quoted at 305.25 on Tuesday, the level it has been trading at since last August.
Traders said the dollar was fetching between 495 and 499 naira on the black market. It was quoted at 497 on the black market two weeks ago.
The approved bureau de change operators set their first ever reference exchange rate for the naira this month and have maintained the same quote for the currency at 399 per dollar for the past three weeks.
Foreign exchange bureaus said international money transfer agents were selling $8,000 to each of their 3,000 members weekly to support liquidity, which is far short of market demand.
The government has been pressing retail operators to narrow what it says is a damaging gulf between the naira’s official rate and the unapproved open retail market – black market.
The naira lost a third of its official value against the greenback in 2016 after the central bank scrapped a currency peg in a bid to alleviate dollar shortages.
Retail currency operators account for less than 5 percent of total foreign currency trading in Nigeria. But with liquidity poor on the official market due to low oil revenues and the central bank left as the main dollar supplier, the bureau de changes have done more business.