| LAGOS, March 23
LAGOS, March 23 The gap between what traders bid
and offer for Nigeria's naira on the black market has widened
following a series of central bank interventions on the official
Traders are trying to hedge against losses after the
currency firmed sharply during previous session.
The central bank has been intervening on the official market
in recent weeks to narrow the official currency spread with the
black market rate.
It offered to sell $100 million in currency forwards on
Bid-offer spread widened as much as 15 naira on the black
market on Thursday after the currency gained 4.9 percent on
Wednesday to a seven-month high. It firmed to as much as 385 on
the black market. Others quoted 406 to the dollar.
On the official market, the naira was quoted at 308 per
dollar on Thursday and traded with a spread of 0.50 naira.
"Everyone is hedging their bets. We bought the dollar as
high as 500 naira and we don't know where the rate is going,"
one black market trader, known as Salisu said.
He expected the naira to firm further.
Central Bank Governor Godwin Emefiele on Tuesday said that
speculators betting on a naira fall "are taking a risk and will
lose". He added that he expects the black market rates to narrow
Bid-offer spread on the black market was 5 naira before
The bank has also been weakening the naira on the official
market to converge rates, traders say. But has said the weakness
was not a devaluation and it has not provided a target rate.
Aminu Gwadabe, head of Nigeria exchange bureaus, told
Reuters he expected the naira to stabilise around 380-400 to the
dollar, but added that the central bank must review the
multiplicity of rates.
The West African nation has at least five exchange rates -
the official one, a rate for Muslim pilgrims going to Saudi
Arabia, the one for school fees abroad and a retail rate set by
licensed exchange bureaus at 399.
(Editing by Editing by Jeremy Gaunt)