March 5, 2015 / 4:13 PM / 4 years ago

Exclusive: Nigeria's central bank fixes spread on dollar sales by oil firms

(Reuters) - Nigeria’s central bank has fixed the rate at which banks can buy dollars from oil companies at not more than 2 naira spread to its clearing rate, dealers said, its latest attempt to prop up the currency hit by the drop in oil prices.

The naira crashed through the psychologically important level of 200 to the dollar last month in a rout triggered by weak oil prices and escalating tension over the postponement of a presidential election in Africa’s biggest economy.

The central bank has pledged to stabilize the naira and has been deploying various measures.

Dealers said the central bank did not issue a formal circular on the directive, but instead resorted to persuasion, adding that the total outstanding dollar demand of about $600 million was unmet.

“The central bank on Monday fixed the rate at which we can buy dollars from oil companies,” one dealer told Reuters.

The local unit of Royal Dutch Shell (RDSa.L) sold an undisclosed amount of dollars this week, as well as Brass LNG and Eni (ENI.MI) but the sales have failed to buoy the naira.

Oil companies usually sell dollars through an auction to lenders to buy naira to fund their local operations.

The naira closed at 197 to the dollar on Thursday, firmer than 199.9 its ended on Wednesday.

Dealers said the bank had beefed up inspection of commercial bank’s trading books to verify utilization of its dollar sales.

The central bank scrapped its bi-weekly currency auctions last month and a market body said it would sell dollars only at 198 naira, a move that amounts to a de facto devaluation of the currency of Africa’s biggest economy.

The central bank also barred lenders from reselling oil company dollars to other lenders unless the sale was backed by a customer order, dealers said.

Editing by James Macharia/Jeremy Gaunt

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