Nigeria naira eases on black market as FX demand pressure resurfaces

ABUJA: Nigerian naira eased 0.85% on the black market on Friday to 470 against the dollar as demand pressure resurfaced on the unofficial currency market, in the wake of dollar shortages in the economy, traders said.

Traders had expected the currency to trade flat on the black market on the hopes that higher oil prices will boost Nigeria's foreign exchange supplies. Global oil prices rose to a more than two-month high above $45 a barrel on Wednesday.

Oil prices fell on Friday, pressured by fears about a slow recovery in the global economy and fuel demand due to rising coronavirus infections, but hopes for a vaccine kept the market on track for a second straight weekly gain.

Dollar demand has been swelling and piling pressure on the naira. Importers with past due obligations have scrambled for hard currency while providers of foreign exchange, such as offshore investors, have exited.

Traders said importers were seeking dollars to buy goods ahead of Christmas sales next month.

The dollar was quoted at 381 naira on the official market. It traded at 386.50 naira on the over-the-counter spot market , widely quoted by investors and importers, on thin volumes.

Nigeria's central bank has managed demand in the past by restricting access to forex for goods it says can be produced locally. It recently ordered lenders to restrict bank accounts of individuals or firms dealing with black market traders, they said.