LAGOS: Nigeria's naira fell 1.4 percent against the U.S. currency on Tuesday, with no fresh dollar supply and after the central bank dropped a directive that had stopped commercial lenders from taking positions in the forex market, dealers said.
The unit closed at 183.70 naira to the dollar, weaker than Monday's close of 181.20 naira.
The central bank on Tuesday said commercial banks can hold 0.1 percent of their shareholders' funds in foreign currency, reversing a directive enforced last month to stop lenders from dealing in hard currency on their account.
The move is intended to curb speculation in the naira, which has been hit hard in the past few months by falling oil prices.
"The market re-opened two-way quotes today with the central bank allowing banks to hold some dollars against their position, (but) there was no liquidity," one dealer told Reuters.
The central bank devalued the naira two months ago, and in December tightened trading rules to try to curb speculation against the currency, slowing trading to a trickle.
The devaluation of its target band by 8 percent to 160-176 against the dollar was meant to halt the slide in foreign reserves. But the naira has traded well outside that band, and reserves are still falling.
The bank sold $249 million at 168 naira to the dollar at its twice-weekly auction on Monday, dealers said, higher than the $200 million it earlier offered. The central bank has been selling the dollar at 168 naira since the devaluation, but the interbank market has traded lower.
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