The Nigeria's naira yesterday suffered a huge loss at the black market as the country’s external reserves fell to a two-week low after the Central Bank of Nigeria pledged to step up dollar sales.
This came just as the CBN said it would announce a new exchange rate for Bureau De Change Operators next week, Reuters reported.
The central bank had on Tuesday set a rate of N362/dollar for the BDC operators to sell the greenback to customers, an 11 per cent rise over the 399 it set in January.
The CBN has been selling the dollars on the official market in order to narrow the spread with the black market rate, which was quoted at a record low of N520 per dollar a month ago.
On Friday, the black market naira rate, which has firmed 17 per cent since last month due to central bank dollar sales on the official market aimed at narrowing the spread, eased by 1.8 per cent to 390/dollar, Thomson Reuters data showed.
The naira held its level at 306.35 to the dollar after the central bank sold $1.5m on the spot market.
The CBN had on Thursday said it would increase the amount it was offering to the BDCs to $10,000 per member from $8,000, but would announce a new rate on April 3.
Traders said the new rate announcement had created uncertainty and caused the naira to trade weaker on the black market.
But dollar buffers have started to decline. Traders estimate that the bank has sold more than $1bn in currency forwards since last month to boost liquidity.
The external reserves, which have risen by 16.1 per cent since the start of the year, stood at $30.29bn by March 29, but are still far off their peak of $64bn, hit in August 2008, the CBN data showed.
The International Monetary Fund on Thursday urged the Federal Government to lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates in order to revive the economy.
Economic and financial experts said they were not sure if the CBN would continue to intervene in the market, especially as the price of oil continued to decline slightly in recent times.
Some analysts believe the central bank may not cut further the N360/dollar rate set for the sale of the greenback for invisibles by commercial banks.