Traders have come to say that “Naira hit its weakest level on the black market in more than a week at
460 to the dollar on Wednesday, as a central bank make a move to channel
dollars to retail currency outlets failed to ease liquidity shortages.”

On the official market, the naira ended at 305.50
per dollar, a level it has closed at for more than two months, supported
central bank interventions.

“The
naira had been relatively stable on the black market after the bank
asked international money transfer firms to sell dollars directly to
bureau de change operators to boost liquidity and narrow the gulf with
the official market.

The directive was initially effective, traders said, but its impact has been limited due to few dollars coming into Nigeria.

“What we get from Travelex is not sufficient,” one trader told Reuters, referring to demand in the market.

International
money trasfer firm, Travelex, sells around $15,000 to 1,000 retail
currency outlets weekly, but the amount is a fraction of what is
required to cover demand from individuals and small businesses.

Dollar
shortages have caused many firms to halt operations and lay off
workers, compounding an economic crisis exacerbated the fall in
global prices for oil, which accounts for 70 percent of Nigeria’s budget
revenue.

The
central bank has struggled to support the local currency as its dollar
reserves have continued to fall. Traders say the naira has been testing
new lows as they try to find thresholds where liquidity can begin to
return”