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Naira Hits Record Low of 321 on Dollar Shortage

Naira hit a record low of 321 to the dollar on the parallel market on Thursday, traders said, as importers desperate to meet their obligations scrambled for dollars, Reuters reports.

The central bank left its official rate unchanged at 197 naira to the dollar on its official interbank window.

Tumbling global oil prices have battered Africa’s top crude exporter, with foreign exchange reserves down to an 11-year low at $27.89 billion by Feb. 9.

Nigeria’s government is concerned that further depreciation will hurt poor Nigerians, but the bank’s refusal to revise the pegged exchange rate has widened a chasm between official rates and the parallel market.

“We see the naira falling further in coming days if the central bank fails to lift the dollar restriction,” Aminu Gwadabe, head of Nigeria association of Bureau de change said.

Last month, Nigeria’s central bank halted dollar sales to non-bank foreign exchange operators and allowed commercial banks to accept dollar deposits, in a failed effort to shore up dwindling foreign reserves.

Around 90 percent of Nigeria’s foreign exchange earnings comes from crude oil exports, but mismanagement of its refineries means it must also import expensive refined fuel.

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