Nigeria’s central bank will strive to increase its foreign reserves to safeguard the value of the naira currency and has put in place measures to curb speculation, it said on Thursday.
The statement came as Nigeria’s economy takes a battering from both the new coronavirus pandemic and a global oil price crash. In an effort to stem the worst effects, the government is turning to foreign reserves and ramping up debt.
Nigeria’s reserves declined $8.5 billion to around $36 billion in May, the central bank said. The naira, quoted at 360 on the official market, is trading on the unofficial black market at around 455 to the dollar.
Dollar shortages have plagued Nigeria’s economy since the global oil price crash slashed government revenues and weakened the naira.
The central bank statement did not say by how much it wants to increase reserves or whether it saw an equilibrium exchange rate of the naira against the U.S. dollar.
On Wednesday the bank said it would work towards the gradual unification of exchange rates across all forex windows, echoing a similar call by the finance minister a week earlier.
Nigeria, Africa’s largest economy, operates a multiple exchange rate regime, which it has used to manage pressure on the currency and to absorb the impact of low oil prices.