Nigerian naira drops, supply falls short

LAGOS, March 3 (Reuters) - Nigeria's central bank sold $202 million at 146.02 naira to the dollar at its bi-weekly foreign exchange auction on Monday, while the local currency NGN= slipped further on the parallel black market, traders said.

The forex supplied by the central bank fell short of the $385 million demanded, traders said on Tuesday, helping to push the naira to 170 on the black market from 167 to the dollar at the end of last week.

The central bank has consistently failed to meet demand at its foreign exchange auctions. It sold $235 million at its last auction on Wednesday, below demand of $293 million.

It has forbidden commercial banks from reselling currency bought at its auction or any other sources on the interbank market, part of efforts to stem a decline in the naira of more than 20 percent against the dollar in recent months.

That has made the black market the only alternative source for the greenback.

Falling world oil prices, which are eating into foreign earnings in Africa's top oil producer and clouding its economic outlook, have precipitated the naira's decline. (Reporting by Oludare Mayowa)