ABUJA: Nigeria's central bank has weakened the naira by 1.5% to 390 per dollar for exchange bureaux, in an attempt to ease pressure on the currency, which has hit new lows on the black market as dollar scarcity squeezes the economy.
The naira eased across markets on Friday. It fell close to a 3-1/2 year low of 500 naira on the black market while the futures market slid past a record low of 600 to the dollar for the five-year settlement.
The new rate due to take effect from Monday, takes the exchange rate closer to the over-the-counter spot market, quoted by investors and importers, which traded at 393 naira on Friday.
One central bank official confirmed the adjustment and said it was a gradual move. The bank last adjusted the rate for exchange bureaux to 384 naira in August from 380 naira in March when it devalued the official rate by 15%.
"The pressure is strong," the central bank official said. "The difference between the black market and the official market is becoming significant and is hurting the economy."
The widening gap between the official and black markets may cause remittances to slow while exporters could refuse to repatriate their proceeds, the official said. Finance Minister Zainab Ahmed said on Friday the government was concerned about the exchange rate gap.
Rising dollar demand has been piling pressure on the naira. Importers with obligations have scrambled for hard currency, while providers of foreign exchange, such as offshore investors, have exited.
The central bank has set policies to restrict access to the official window, funnelling demand to the black market that holds less than 5% of trades. The bank has said the black market rate should not be used to determine the naira's value.
International lenders, such as the World Bank, have pressed Nigeria to implement currency reforms to qualify for budget support loans after the novel coronavirus triggered an oil price crash that slashed the government's income. The World Bank is considering a $1.5 billion loan for Nigeria.