The Nigerian naira’s plunge in the unofficial foreign-exchange market is an indication the central bank may have to weaken the official rate further after last month’s devaluation.


The Central Bank of Nigeria moved to merge the two rates when it devalued the naira official rate to 360 per dollar from 307 naira and moved the rate at which investors and exporters could purchase the greenback to 380 naira from 366 naira on March 21.

The 4% devaluation was far less than other commodity producers. Russia’s ruble is down by 17% and Colombia’s peso by 19% since the beginning of this year. Crude accounts for 90% of foreign-exchange earnings and reserves are down 12% since January to $33.6 billion.

One dollar has bought 450 naira in the parallel market since Friday, according to the website abokifx.com, a 14% spread from the interbank rate, which weakened to 387.48 naira per dollar as of 10:46 a.m. local time on Tuesday. Twelve-month naira forwards were trading at 509.90 naira per dollar as of 10:46 a.m. suggesting investors see the currency falling to around that level in a year.


Central Bank of Nigeria spokesman Isaac Okorafor didn’t reply to a text message seeking comment.

Retail investors are trying to diversify their portfolios by shifting to foreign-currency assets, according to Omotola Abimbola, an analyst at Chapel Hill Denham in Lagos.

“For us to see to improved convergence in the rates, we need to see the central bank stepping into the foreign-exchange market again to begin intervention sales,” Abimbola said.