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Risk of Nigeria devaluing Naira rising - Reuters poll

Nigeria

<p>Nigeria’s authorities may soon devalue the naira to narrow the gap between the official and black market rates to boost confidence in the economy, a Reuters poll shows.</p> <p>A shortage of dollars in Nigeria has led the black market to charge a higher premium in compensation for that scarcity in the official market.</p> <p>The poll suggests there is a 45 percent chance that the central bank will devalue the naira in coming weeks amid speculation that the government is stepping closer to liberalising it.</p> <p>Last week, the central bank effectively devalued the naira for private individuals by offering them dollars at a rate of 1 dollar for 366 naira, instead of the official 305 rate.</p> <p>Nigeria’s central bank auctioned $230 million in forward contracts on the official market on Thursday after selling $370 million earlier in the same week to boost dollar liquidity and help narrow the gap between the official and black market rates.</p> <p>Devaluations are painful, mostly to the poor, as the cost of living increases. But analysts say they are necessary to fix the broader economy.</p> <p>Nigeria is reeling from a crash in global oil prices which have collapsed from over $100 a barrel in 2014 to currently around half that price.</p>
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