The naira weakened on the black market on Thursday to 371-naira per dollar, the lowest since August last year.

The Central Bank of Nigeria, CBN is not taking this lying low. It is now planning a special forex intervention to increase dollar sales and meet demand.

On Friday, the CBN said it would introduce the special forex intervention to meet demand from individuals with dollar expenses by increasing its auction days to four from three starting on December 6.

The dollar’s fortune is being affected by dwindling oil prices which has dropped by more than 20% within this month alone and traders now fear that CBN may not have enough reserves to defend the currency against a possible further weakening of oil prices as foreign investors have been pulling money out of Nigerian assets.

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“With the approach of the yuletide season and the resultant increase in the demand for personal/business travel allowance, the CBN has introduced a special intervention day every Thursday for $15,000 per BDC (bureau de change),” the bank said in a statement.

Nigeria has been hit by dollar shortages since 2016. Traders say shortages could worsen towards year end as investors close their books, leaving the central bank as the main supplier of hard currency in the market.

The bank has been using up its dollar reserves to keep the naira stable, spending $2.2 billion in October to prop up the currency as foreign investors have also left the market in favour of rising interest rates in developed economies.

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