The major West African producer has also increased interest rates as it looks to stave off a large year-on-year drop in foreign reserves.
The Nigerian Central Bank has moved the target band of the naira against the US dollar from between 150 naira ($0.84) and 160 naira to between 160 naira and 176 naira. The naira is currently trading at around 177.5 naira for a dollar.
The bank said it can no longer defend the naira against the weakening oil price, with crude oil slipping to $73.79 per barrel on Wednesday as Asia’s top economies showed signs of weakness.
Foreign reserves in Nigeria, Africa’s largest oil producer, slipped 18% from last year to a current level of $37 billion. Crude oil production was at 2.03 million barrels per day in September.
Nigeria has also raised interest rates 100 basis points from 12% to 13%.
Angola, another significant African producer, saw its currency, the kwanza, sink this week on the back of weak oil prices.
Source – Upstreamonline.com
