The naira traded at 360 for over six months after the central bank in April 2017 liberalised the currency for investors in the wake of a currency crisis brought on by low oil prices that also slashed government revenues.
Traders said the currency started to weaken last week as demand piled up especially from companies seeking to repatriate dividends and investors booking profits from local assets.
Importers buying goods from abroad were also exerting pressure on the naira.
Nigeria emerged from its first recession in a quarter of a century last year but growth is still fragile. It then introduced a multiple exchange rate regime to manage dollar demand as a way to alleviate chronic shortages on the currency markets.
On the official market the naira is quoted at around 305 per dollar, a level it has been for over a year, supported by central bank’s regular interventions.
MTN’s Nigeria operation declared a dividend of 50 billion naira ($159 mln) by its local unit in 2017, a company presentation seen by Reuters showed, which Africa’s biggest telecom group would seek to repatriate to offshore investors. MTN further paid a dividend in the first quarter, it said.
The central bank is gradually loosening policy to adopt a more dovish stance on interest rates especially as its foreign reserves are rising, giving the West African country a buffer with which to defend the naira.
The bank has reduced its issuance of open market bills to tighten naira liquidity, traders said with banking system liquidity closing at around 200 billion naira in credit on Monday, to lower treasury yields.