CBN to Ease Naira Pressure with $100m Auction

By Time Nigeria

In furtherance to improve dollar liquidity and ease pressure on the Nigerian currency, Naira, the Central Bank of Nigeria, CBN has again set to sell 100 million dollars at a special wholesale spot and forward auction. This was disclosed by the Apex Bank on Monday.

It would be recalled that Nigerian economy was gripped in a deep economic mess of currency crisis as a result of low oil price at the international market which has deflated its foreign reserves and created chronic dollar shortages in circulation, this has necessitated regular injections of dollars by the Apex bank in order to narrow the spread between the official and black market rates.

For this singular reason, the Bankers’ bank has sold more than $4 billion to various sectors of the economy since it started intervening on the official market in February.

Financial experts and currency traders have confirmed that the policy has resulted in a steady increased liquidity in the official market and helped to ease pressure on the naira.

Traders, citing a notice from the regulator, said the currency forwards being auctioned on Monday would be settled within 60-days and backed by customer demand.

The naira was quoted at 381.91 per dollar at the investor window on Monday, according to the market regulator FMDQ OTC Securities Exchange.

It was quoted at 315 a dollar on the official interbank market by commercial lenders, while it trading at 380 a dollar on the black market.

The naira has firmed on the black market from its record low of 520 to the dollar in February, before the central bank’s intervention in the foreign exchange market.

 

 

 

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