Nigeria’s naira weakened against the dollar on the black market on Wednesday even as the central bank increased the supply of dollars to currency retail bureaux in an attempt to boost support for the local currency.
The naira weakened to about 398 a dollar on the black market, against 390 per dollar on Friday, as speculators took advantage of increased demand to make quick gains, traders said.
The president of the association of bureau de change operators, Aminu Gwadabe, said the central bank had offered to sell an additional $10,000 to its members on Thursday in a bid to provide support for the naira.
“The central bank is selling additional $10,000 to bureau de change on Thursday beside the earlier one disbursed on Tuesday, making it a total of $20,000 per week to each member,” Gwadabe said.
With the planned sales, retail currency bureaux will receive around $65 million per week from the central bank, he said.
“We hope to see the naira appreciating on the impact of the fresh dollar sales by the central bank to the bureau de change operators,” he said in a telephone interview.
Last week, the central bank set a rate of 362 naira for exchange bureaux to sell the U.S. currency to consumers and also increased the amount of dollar sales to each currency seller to $10,000, up from $5,000, in its bid to improve dollar liquidity.
The International Monetary Fund (IMF) said on Wednesday that the naira is over-valued by around 10 to 20 percent, and called for changes to exchange rate policy.
The Nigerian currency closed at 306.20 to the dollar on the official interbank market, slightly higher than it closed on Tuesday.