Nigeria's naira currency weakened 1.25 percent to 324 to the dollar on the parallel market on Thursday after the West African country raised gasoline prices by 67 percent, traders said.
"People are holding on to their dollars in anticipation of an increase in demand for dollars by oil importers," said Aminu Gwadabe, head of the bureaux de change operators association.
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| Emefiele, CBN governor |
On Wednesday, the Nigerian government said fuel importers were from now on allowed to get dollars from the parallel market to help ease acute shortages.
In January, the central bank banned dollar sales to retail bureaux de change and reduced supply at its official interbank forex market in an effort to conserve reserves, now at their lowest level.
Nigeria earns around 90 percent of its foreign exchange earnings from crude oil exports, but mismanagement of its refineries means it must also import expensive refined fuel, which eats deep into its reserves.
Before Wednesday when the government increased prices of fuel, Africa's biggest economy suffered acute shortages of gasoline, causing motorists to queue endlessly for a fill-up.
"We are already seeing demand in excess of $200 million and above coming to the market, from less than $300,000 prior, but there is no supply to meet up with the increase," Gwadabe said.
The local currency is quoted at 199.40 at the interbank market, near the officially peg rate of 197 to the dollar.
"There is dollar scarcity right now; even at 324 naira you can't find dollar to buy," one trader told Reuters.
Nigeria's forex reserves have fallen 2.68 percent in one month to $27.83 billion as of May 10.
*First published by Reuters
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