Categories: EconomyNews

CBN Seeks to Ease Naira Pressure with $100 Million Auction

The central bank plans to sell $100 million at a special wholesale spot and forwards auction on Monday as it tries to improve dollar liquidity and ease pressure on the naira.

Africa’s largest economy, grappling with a currency crisis brought on by low oil prices which have hammered its foreign reserves and created chronic dollar shortages, has resorted to regular injections of dollars by the central bank to narrow the spread between the official and black market rates.

It has sold more than $4 billion to various sectors of the economy since the central bank started intervening on the official market in February, which currency traders say has 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.

Reuters

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