The Central Bank of Nigeria on Thursday said it plans to boost its dollar sales to exchange bureaus after the currency weakened sharply on the black market.
The apex bank in a statement said it would introduce a special forex intervention to meet demand from individuals with dollar expenses by increasing its auction days to four from three starting on December 6.
Prior to this time, the intervention days are Mondays, Wednesdays and Fridays.
“With the approach of the yuletide season and the resultant increase in the demand for personal/business travel allowance, the CBN has in addition to the existing market days (Monday, Wednesday and Friday) introduced a special intervention every Thursday for $15,000 per BDC (bureau de change),” the bank said in a statement Thursday.
Naira weakened by 1 percent on Thursday on the black market, slumping to 370 per dollar. It was the currency’s weakest decline since August 2017.
Nigeria has been hit by dollar shortages since 2016. Traders say shortages could worsen towards year end as investors close their books, leaving the central bank as the main supplier of hard currency in the market.
The bank has been using up its dollar reserves to keep the naira stable. In October, it spent $2.2 billion to prop up the currency.
On Thursday, the naira also weakened on the over-the-counter market where it is traded by banks. It was traded for 306.80 on the official market, which represents the stable rate at which the central bank has kept it for over a year through frequent interventions.
The bank said in its statement Thursday that BDCs must note that cut-off time for receiving naira deposits into their bank accounts has been scheduled for 10:00am.
Apart from its frequent interventions, the apex bank has also been raising treasury yields to lure offshore funds. However, analysts say lower oil prices and the prospect of the 2019 campaign are deterring foreign investors.
Nigeria’s oil minister, Ibe Kachikwu, said on Wednesday that the nation is still indecisive about whether it would entertain production cuts ahead of OPEC meeting next week.