The Nigerian central bank devalued the official currency rate by 15% on Friday, in a move to converge a multiple exchange rate regime which it has used to manage pressure on the naira, traders said according to Reuters.
The currency in Nigeria, which is Africa’s biggest economy and relies on crude sales for 90% of foreign exchange earnings, has come under pressure after oil prices plunged following a disagreement between Russia and Saudi Arabia over a deeper production cut. The coronavirus outbreak has also hit global demand for oil.
The central bank on Friday sold the U.S. dollar to local Jaiz Bank at 360 naira on the official market, weaker than the 306 where it was previously pegged for more than two years, traders said.
Traders said no quotes were shown on Friday for the naira on the official market, which is supported by the central bank. Previously, traders had refused to show quotes on the over-the-counter spot market after the bank vowed to crack down on speculators.
The central bank did not respond to a request for comment on the currency adjustment. Jaiz Bank also declined comment.
The adjustment comes after the impact of the oil price plunge spread across asset classes in Nigeria, causing investors to widen spreads on the bond market, sell stocks and weaken the country’s dollar reserves.