May 5, 2020 / 11:12 AM / 25 days ago

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

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. (Reporting by Chijioke Ohuocha Editing by Mark Heinrich)

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