| ABUJA, April 12
ABUJA, April 12 Nigeria's central bank will soon
resume selling large volumes of dollars on the spot market and
make the U.S. currency available to foreign investors at an
undisclosed rate so that they can repatriate dividends, it said.
Oil-producing Nigeria has been gripped by a shortage of
dollars since crude prices plunged, triggering a currency crisis
that left foreign companies struggling to purchase hard currency
and battered investor confidence.
It lifted a temporary currency peg last year, but in order
to protect its precariously low foreign reserves it has
introduced a convoluted exchange rate system that sees different
buyers paying various rates for dollars.
The policy has masked pressures on the naira and stunted
hard currency inflows as investors struggle to price naira
assets, according to analysts.
"The (central bank) will soon ... begin spot forex auction
(and) open a special window for investors to trade freely ...
dividends and investment remittances," the bank said in a
statement dated on Tuesday.
Africa's biggest economy has at least five exchange rates:
the official rate, the black market, a rate for Muslim pilgrims
going to Saudi Arabia, a retail rate set by licensed exchange
bureaus and a rate for foreign travel, school and medical fees.
The naira closed trading on Wednesday at 306.10 on the spot
market, supported by central bank dollar sales, and 410 on the
The bank has been using the forward market to meet demand
for dollars, making only tiny volumes available on the spot
market and using those sales to influence the naira's official
Customers needing dollars immediately have had to pile into
the black market, resulting in a sharp weakening of the naira's
On Monday, the central bank said it planned to sell
shorter-dated dollar forwards to inject liquidity into the
official market and support the naira, selling $100 million on
Tuesday on such contracts and offering the same amount on
The bank also said on Monday it would sell up to $20,000 per
quarter to small firms. It did not disclose a rate of exchange
for the sale.
Analysts estimate the bank has sold close to $4.1 billion in
forward sales in roughly a month.
In its Tuesday statement, the bank said now-rising oil
prices had increased its foreign reserves to $30 billion from
$24 billion a year ago.
(Writing by Chijioke Ohuocha; Editing by Alexis Akwagyiram and