The multiplicity of foreign exchange rates is hurting Nigeria’s naira assets as foreign investors find it hard to price them, analysts say.
Nigeria’s central bank set a new naira rate for retail exchange bureaus to sell dollars to consumers, the head of the bureau association told Reuters on Tuesday.
The new rate of 362 per dollar is an 11 percent rise from the last setting in January and will bring the selling price at bureaus close to another consumer rate set on Monday.
Nigeria has several exchange rates — the official one, the black market, a rate for Muslim pilgrims going to Saudi Arabia and a rate for foreign travel, school and medical fees.
Aminu Gwadabe, head of Nigeria exchange bureaus, said the central bank would sell $8,000 each to his members this week at a rate of 360 per dollar, which they would resell to consumers at a profit margin of 2 naira.
Nigeria is battling a currency crisis brought on by low prices for oil, its main export, that has hammered foreign reserves and created chronic dollar shortages, frustrating businesses and individuals. Africa’s biggest economy is in recession for the first time in quarter of a century.
On Monday, the central bank set a rate of 360 naira per dollar for consumers with certain foreign expenses sourcing hard currency through commercial lenders, and stepped up intervention on the official market to narrow the gap with the black market.
The bank sold $1.5 million on Tuesday to boost liquidity but also sold the naira at 306.15 on the spot market, 20 percent weaker than the black market rate.
The central bank, which opposes a free naira float, has been selling the U.S. currency on the official market to try to narrow the spread with the black market rate, which is currently 375, down from 520 per dollar a month ago.
Gwadabe told Reuters on Monday that his members had incurred currency losses of 130 million naira based on trading at the old rate after the central bank interventions caused the naira to rally on the black market.
He said his members could boycott central bank sales unless the regulator reviews rates for exchange bureaus in addition to addressing the multiplicity of rates on the market. (Writing by Chijioke Ohuocha; Editing by Catherine Evans)