(Rewrites with central bank intervention, analyst comments)
By Oludare Mayowa and Chijioke Ohuocha
LAGOS, March 27 Nigeria set a new naira exchange
rate on Monday for consumers with certain foreign expenses and
stepped up dollar sales on the official market to narrow the
spread with the black market.
Analysts doubted whether the moves would draw investors back
to the suffering economy.
Nigeria has at least five exchange rates -- the official
one, the black market, a rate for Muslim pilgrims going to Saudi
Arabia, a retail rate set by licensed exchange bureaux and a
rate for foreign travel, school and medical fees.
It was this last that was changed -- to 360 naira to the
dollar, a four percent rise since the last rate was
Nigeria is battling a currency crisis brought on by low oil
prices, which has tipped its economy into a recession, hammered
its dollar reserves and created chronic dollar shortages,
frustrating businesses and individuals.
The central bank, opposed to a free naira float, has been
selling the U.S. currency on the official currency market to try
to narrow the spread with the black market rate, which was at
390 last Friday, albeit down from 520 to the dollar a month ago.
On Monday it also sold dollars on the official market and
said its supervisors would visit lenders to ensure compliance
with the new retail rate.
The bank auctioned $1.5 million and offered $100 million on
the forward market to boost liquidity. However, it sold naira on
the spot market at 306.30, 21 percent weaker than the black
"Investors are clear that what they want is a properly
functioning FX regime where ... new FX shortages are not
threatened. The new system does not currently meet those
requirements, even if FX sales have increased," said Razia Khan,
Africa chief economist at Standard Chartered Bank.
The central bank also barred lenders from reselling foreign
currency to retail exchange bureaux to curb speculation.
Aminu Gwadabe, head of Nigeria exchange bureaux, told
Reuters his members had incurred currency losses of 130 million
naira based on the rate differential after the central bank sold
$25 million to them at 381 naira last week.
Gwadabe said that exchange bureaus may boycott central bank
sales this week, adding that the regulator must review the
multiplicity of rates on the currency market.
"The multiple currency system currently in place makes it
difficult to ascertain how much pressure the naira is still
under, and this also complicates pricing for investors," said
Cobus de Hart, senior economist at NKC in Johannesburg.
"We remain sceptical in relation to the central bank's
current approach," he said, adding that lower oil prices, a
slowly rising foreign reserves and currency forwards due to
mature, may soon test the bank.
(Additional reporting by Paul Carsten in Abuja; Writing by
Chijioke Ohuocha; Editing by Jeremy Gaunt)