The Nigerian currency naira on Thursday, November 29, weakened by 1 percent on the black market to 370 per dollar – its record lowest since August 2017.

Reuters quoted traders as saying that some black market outlets were hoarding dollars, fearing a recent sharp fall in oil prices could lead to a shortage of the US currency.

Global prices of oil, Nigeria’s chief export, have dropped more than 20 percent this month.

Traders now fear that the Nigerian central bank may not have enough reserves to defend the currency against a possible further weakening of oil prices as foreign investors have been pulling money out of Nigerian assets.

“There’s no new investment coming in and oil prices have been dropping so investors are watching while some are exiting,” one trader said.

The central bank has been using up foreign exchange reserves to keep the naira stable, spending $2.2bn in October to prop up the currency as foreign investors have also left the market in favour of rising interest rates in developed economies.

The CBN data released on Thursday showed that the nation’s foreign reserves stood at $41.9bn as of November 27, down 12.3 per cent from a peak of $47.8bn reached in June.

Investors have also been pulling out funds from equities. On Thursday, the benchmark stock index fell by 1.33 per cent to 30,611 basis points.

The naira also weakened on the over-the-counter market where it is traded by banks. It was exchanged for between 364 and 364.50 to the dollar on Thursday, compared to 363 a week earlier. At forex bureau, it was quoted at 366 per dollar, while a unit fetched 306.30 on the official market.