The naira hit a fresh low of 520 on the black market on Monday, as retail currency traders tried to digest a new central bank decision to sell dollars to retail users through commercial lenders, one retail trader said.
The central bank plans to sell $1 million weekly to each of the country’s 21 commercial lenders at a rate of 375 naira to clear a backlog of demand for retail users and try to narrow the premium between the official and black market rates, traders said on Monday.
On Friday, the naira was quoted at 516 on the black market. On the official market, the naira was quoted at 305.50
Retail currency users buy dollars from licensed bureaux de change (BDC). However, due to the central bank’s inability to meet dollar demand, BDCs have tended to source dollars from private sources and resell at a much higher margin, fuelling the black market.