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Nigeria’s central bank sold dollars to retail customers as low as 466.75 naira in January

LAGOS, March 2  – Nigeria’s central bank sold a total of $989.6 million to importers and retail customers in January with commercial banks allocating them at rates as low as 466.75 naira, a record low by banks for sales to customers, data showed.

This was prior to central bank’s decision in February to sell dollars to Nigerians wanting to pay for travel, foreign medical bills or school fees at around 20 percent above the official rate of 305.

Nigeria has been running short of dollars as a result of lower global prices for oil, its major export. The economy shrank last year for the first time in quarter of a century.

The shortage has weakened the naira on the black market, where it trades far lower than the official interbank rate.

The January figures also showed that Nigeria’s Access Bank exchanged $50 million with U.S. lender JP Morgan at 400 naira per dollar and another $100 million with South Africa’s ABSA at 329 naira.

It showed a range of between 257.50 and 466.75 naira for dollar allocations in January.

One commercial bank sold the dollar as low as 466.75 naira for school fees while another sold at 257.5 for spare parts in January. The central bank settled some futures contract at 274 naira per dollar at the January sale.

Last week the bank sold a total of $780 million in forward contracts to support the naira after effectively devaluing the naira for individuals, offering to sell them dollars at about half the premium the black market charges.

On Thursday it said it will sell forward contracts on the dollar via a book-building process to clear dollar demand for importers but not disclose how much was on offer.

Though the central bank has stepped up dollar supply in recent days the local currency still trades at a more-than 30 percent premium on the black market.

The naira officially closed at 305.25 on Thursday after the central bank intervened to prop up the naira on the interbank market, traders said. However, the currency lost some grounds on the black market, quoted 458 per dollar.


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