Naira Hits New Low in Parallel Market as Dollar Shortage Worsens

  • Nigerian currency declines to 337 per dollar on black market
  • Nigerians buying dollars they need for year ahead: Gwadabe

The naira fell for a fourth day against the dollar on Friday to a record low in trading on the unofficial parallel market as Nigeria’s shortage of U.S. currency exacerbated.

The currency of Africa’s largest oil producer retreated to 337 per dollar, down from 321.50 on Thursday, said Aminu Gwadabe, president of Lagos-based Association of Bureau de Change Operators of Nigeria. The official interbank market rate has been pegged at 197-199 per dollar by the Central Bank of Nigeria since March last year through a series of foreign exchange controls as it seeks to conserve reserves amid a plunge in crude prices.

“The situation is worsening,” Gwadabe said by phone. “The perception of the naira is very negative. People are buying dollars that they need in the next one year.”

The central bank stopped selling foreign exchange to money changers last month, adding to measures that included restricting trading at banks, causing a shortage of dollars in an economy that imports most of its manufactured goods.

The policy has been widely criticized by investors and businesses who blame the restrictions for exacerbating the country’s economic slump. Growth is estimated to have slowed to 3 percent last year, the lowest since 1999. About $10 million is sold daily in the official market, aside from the central bank sales, which is too low to meet demand, Standard Chartered Plc said in a report this week.

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