ABUJA: The Nigerian naira dropped 1.75% on Friday to a record low of 410.50 per dollar on the spot market, traders said, citing dollar scarcity and a lack of central bank intervention on the market.

The naira, which has been weakening on the over-the-counter spot and derivatives markets, dropped to a low of 403.29 naira on Thursday after reaching record intra-day lows since January.

The International Monetary Fund on Monday urged the central bank to reduce its interventions in the spot market and allow for greater adjustment in the exchange rate to eliminate the premium on the black market, where the naira trades more freely, to prevent a backlog building up.

The central bank did not agree with the need for additional exchange rate adjustment, blaming the global environment for the current developments. It added that further exchange rate depreciation would stoke rising inflation.

Nigeria adjusted the exchange rate last year, after an official devaluation in March, in an attempt to align multiple quoted currency rates. But the naira has continued to weaken this year.

The central bank told IMF that it was addressing the forex backlog.

Traders said the central bank has yet to sell dollar to foreign investors seeking to repatriate funds and importers with past-due obligation have been scrambling for hard currency.