Left Menu
Development News Edition

Nigeria suspends foreign exchange sales to retail currency traders

Reuters | Updated: 27-03-2020 00:42 IST | Created: 27-03-2020 00:42 IST
Nigeria suspends foreign exchange sales to retail currency traders

Nigeria's central bank has suspended foreign exchange sales to retail currency traders, a senior bureau de change (BDC) official said, to help protect the naira after a devaluation following the coronavirus outbreak and a fall in oil prices. The central bank last week moved the currency rate for BDC to 380 to the U.S. dollar from the previous 360. It subsequently adjusted the naira's official rate to 360, weaker than its previous peg of 306, implying a 15% devaluation.

Since the currency adjustment, the naira has weakened further. It fell to a new low of 361 to the dollar on the official market and hit 383.25 on the over-the-counter spot market on Thursday. Nigeria, which is Africa's biggest economy and its largest oil exporter, has confirmed 46 coronavirus cases, with one death. It has banned entry to arrivals from countries that have reported more than 1,000 coronavirus cases.

"Until borders are opened, there is no way anyone can provide genuine travel documents we can rely on," the BDC official said on Thursday, adding that some of the countries visited by Nigerians were in lockdown. "The implication is that the currency could weaken on the black market. If you stop the official source then the black market would thrive."

The naira came under pressure after oil prices fell following a disagreement between Russia and Saudi Arabia over a deeper production cut. The coronavirus outbreak has also hit global demand for oil. Quotes on the black market on Thursday were thin, with some dealers pricing the naira much weaker, above 400 to the dollar, closer to where the currency traded on the one-month forward market.

BDCs resell hard currency to individual users with dollar expenses such as medical bills and school fees abroad. However, with the lockdown the central bank assumes that currency demand for these expenditures should not exist, the official said. The central bank did not respond to a request for comment.

Prior to the latest move, the central bank had stepped up forex sales to the country's 5,000 retail currency operators, selling around $20,000 almost daily to shore up the naira. ($1 = 360.00 naira)


TRENDING

OPINION / BLOG / INTERVIEW

Uganda COVID-19 response: Was off to a good start but reopening dwindled prospects

Uganda has shown success in using health information to enhance efficiency of disease surveillance, reporting and monitoring. The success, however, has critical challenges confronting it as the country resumes normal activities....

New farm bills in India: Focusing on farms or farmers?

... ...

Kenya’s COVID-19 response: Chaos amid lack of information

Confusing numbers and scanty information on how effective curfews and lockdowns have been in breaking transmission have amplified coordination and planning challenges in Kenyas response to COVID-19. Without accurate data, it is impossible t...

Farkhad Akhmedov: Calculating the price of impunity from the law

In insistences such as the battle over the Luna, Akhmedov has resorted to extreme legal machinations to subvert the High Courts decision and keep his assets from being seized. ...

Videos

Latest News

UN Syria envoy places hope in new talks, works towards lasting ceasefire

The so-called Small Body of the Constitutional Committee was supposed to have reconvened this month, Geir Pedersen told a video-teleconference meeting of the Security Council on Tuesday, where he again called for greater efforts towards a c...

2020 Climate Action Award winners shine ray of hope

While COVID-19 is the worlds most clear and present danger, climate change is a menace that threatens all future generations, according to the head of the UN climate change convention.The last eight months have been a nightmare for many thr...

UN agency chiefs appeal for ‘open science’ beyond COVID-19, citing the dangers of secrecy and denial

Audrey Azoulay, the Director-General of the UN Educational, Scientific and Cultural Organization UNESCO, Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization WHO and Michelle Bachelet, UN human rights chief OHCHR, s...

Kistner's election delay bid rejected at Supreme Court

A Minnesota Republican candidates bid to delay voting in his congressional race to February due to the death of a third-party candidate was rejected Tuesday at the Supreme Court. Justice Neil Gorsuch, who handles emergency requests from the...

Give Feedback