Naira fell 6.2% lower against the United States dollar on Wednesday at the official market as traders quoted the local currency close to the over-the-counter spot market rate on signs that government would seek to conserve falling reserves.
In a finance ministry document seen by Reuters on Wednesday, Zainab Ahmed, the Minister of Finance said the Nigerian government would move to unify the exchange rates to generate more naira from its foreign inflows and manage the rate in a sustainable fashion.
Government would also order oil firms to sell dollars to the Central Bank of Nigeria (CBN) rather than to the Nigerian National Petroleum Corporation, Mrs Ahmed said, noting that government would deregulate petroleum prices as part of measures to protect oil revenues.
The document said the policies would be implemented over a 12-month period.
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Naira traded at N385 per dollar on the official market supported by the CBN on Wednesday before recovering to N361, where it closed on Tuesday according to data from Refinitiv Eikon.
Nigeria has operated a multiple exchange rate system used by the CBN to manage the strain on the naira. But low dollar supply has plagued the economy after the oil crash triggered by the coronavirus outbreak reduced government revenues and weakened the local currency.
Meanwhile, naira exchanged for N452 to a dollar at the black market on Wednesday over speculations by operators in the market and the effects of the country’s rising profile.
“Speculators are taking advantage of the fact that the major source of foreign currency liquidity is now foreign debt not petro dollars.
“The CBN and the presidential task force need to extend essential services to BDCs to checkmate the unfortunate behaviours of speculators to save our local currency,” said Aminu Gwadabe, President Association of Bureaux De Change Operators of Nigeria.
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