(Reuters) – The Nigerian naira for five-year settlement was quoted at 578.37 to the U.S. dollar on Wednesday, just off a record low of 584.11 last week, as a shortage of dollars piled on pressure, while the central bank seeks to bolster the Nigerian currency.
Nigerian naira banknotes are seen in this picture illustration, September 10, 2018. REUTERS/Afolabi Sotunde/Illustration/File Photo
The naira has been hitting new lows on the black and over-the-counter spot markets since March after the central bank adjusted its official rate, implying a 15% devaluation.
Meanwhile, a crash in oil prices in April, triggered by the coronavirus pandemic, worsened shortages of dollars in the oil-producing nation.
The bank strengthened the naira on the futures market for May 2025 settlement by six naira, traders said on Wednesday.
Introduced in February, 5-year naira futures traded above 550 last month on the derivatives market as dollars ran short on the spot market.
Bankers say the central bank has been intervening in liquidity on the interbank market around the time when the bank plans currency auctions.
A central bank spokesman did not immediately respond to a request for comment.
On Friday, the bank withdrew around 460 billion naira from the banking system, banking sources said.
The bank has resumed dollar sales to local clients, selling around $100 million per week, but has yet to sell to offshore investors, traders say, after it scrapped a planned auction because of lockdown measures to slow the coronavirus.
Importers been left scrambling for hard currency while providers of foreign exchange, such as offshore investors, have exited.
Liquidity on the over-the-counter spot market touched a low of around $31 million on Wednesday from around $300 million a day last year, traders said.
The naira closed at 387.08 on the spot market, while the two-week currency futures settlement quoted the naira at 389.84. The currency was quoted at 361 on the official market, backed by the central bank.
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