Nigeria's naira falls to record low after dollar liquidity plunges 72%

Nigeria’s local currency fell the most in about two weeks to a record low, after of a steep drop in dollar liquidity in the foreign exchange market.

The naira weakened 4.3%, the most since Oct. 15, to 1,670.65 to the dollar on Monday, according to data compiled by Bloomberg. The weakness followed a 72% plunge in dollar liquidity to $81 million - its lowest level in more than a month.

Liquidity in the foreign exchange market has remained low as the West African nation prioritizes building its reserves, which at 39.4 billion dollars on Oct. 24 was the highest in about two years.

Africa’s largest crude producer has struggled to stabilize its currency since it was allowed to trade freely against the dollar in June last year.

The naira has lost about 70% of its value against the dollar and is the third worst performing currency in the world this year after the Lebanese Pound and the Ethiopian Birr.