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LAGOS Feb 21 Nigeria's central bank will sell
$500 million to help improve dollar liquidity, traders said on
Tuesday, a day after the bank effectively devalued the naira for
retail currency sales.
Nigeria has been running short of dollars as its oil
revenues has fallen along with the price of crude. That has
driven the naira to a low of 520 to the dollar on the black
market, far weaker than the official interbank rate of 305.
The central bank, under pressure from the government to
narrow the gulf between the official and black market rates, on
Monday effectively devalued the naira for consumers, offering to
sell them dollars at about half the premium the black market
On Tuesday, the bank said it would sell dollars through
wholesale bids to banks, as opposed to selling to individual
customers. The banks can then allocate the dollars to their
customers, the central bank said in mail to commercial banks,
asking them to maintain the bid spread of 0.50 naira.
The central bank has tried to make the exchange rate more
flexible before, leading to a 30 percent devaluation last year,
only to re-impose a quasi currency peg.
On the non-deliverable forwards market, the naira fell
against the dollar on Tuesday on increased expectation of a
(Reporting by Chijioke Ohuocha; Editing by Larry King)