The Nigerian naira plunged in informal trading on Wednesday as importers sought alternative sources for dollars after the central bank stopped foreign-currency funding for some imports.
The currency declined to 230 per dollar from 226 on Tuesday, Aminu Gwadabe, president of the Association of Bureaus de Change of Nigeria, said by phone from Lagos, the commercial capital. The currency traded at 215 per dollar last week before the new restrictions, he said.
In interbank trading, the naira advanced 0.1 percent to 198.85 naira per dollar at 12.05 p.m. in Lagos. The nation’s foreign-currency reserves have declined 16 percent this year to $29 billion.
The Central Bank of Nigeria listed 41 items, including rice, private jets, foreign securities and Indian incense, which couldn’t be funded in the interbank foreign-currency market or by the use of export proceeds in its bid to conserve external reserves and stabilize the exchange rate.
The restricted items account for as much as $6 billion of goods imported every quarter, according to Gwadabe. “The ban is putting pressure on naira on the streets,” he said.
Faced with a 45 percent plunge since last year’s peak in the price of oil, the source of two-thirds of government revenue, the central bank began imposing currency restrictions as pressure mounted on the naira. The Nigerian currency has weakened 18 percent against the dollar in the past year.