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The Nigerian naira has recorded a minor improvement against the dollar after falling short for over a week now.
The Central Bank of Nigeria on Thursday offered $100m in currency forwards, to be settled within 60 days, currency traders said, quoting a notice from the CBN.
As a result, the naira recorded slight improvement rising from 398/dollar on Wednesday to 397/dollar on Thursday. The central bank has been selling dollars to try to narrow the spread between the naira’s official and black market exchange rates.
This came just as the naira recorded a slight gain against the United States dollar. The CBN had on Wednesday intervened in the Bureau de Change segment of the market, selling $10,000 to operators aside the $10,000 it sold to them on Tuesday.
The Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, said the special intervention of $10,000 for the BDCs was meant to meet the upsurge in the forex requests of low-end customers, which have been on the sudden increase in the past few days.
According to him, the special intervention does not in any way contradict the bank’s newly amended sale policy of selling not more than $10,000 only to the BDCs once a week.
He further explained that the intervention arose due to the increasing demand for forex by Nigerians to address other legitimate needs.
Meanwhile, the CBN spokesman also disclosed to newsmen that the CBN was collating retail requests from authorised dealers upon which sale would be finalised. The central bank had on Monday injected $240m into the foreign exchange market.
Specifically, It released the sum of $90m to meet requests for invisibles such as business travel and personal travel allowances, medical and school fees, while the sum of $150m was also made available to authorised foreign exchange dealers in the interbank wholesale auction window same day.
Economic and financial analysts said the spate of interventions and dollar supply by the central bank would determine the direction of the naira in the coming weeks.
On the back of the previous forex supply by the CBN, the naira had appreciated to 375/dollar early last week. The local currency however weakened to 383/dollar last Thursday before dropping to 390/dollar last Friday.
“The latest dollar injections are yet to fully percolate into the forex market; when that happens the naira will appreciate further,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said.
The naira closed at 306.2 to the dollar on Thursday, same level it closed the previous day.
The CBN had on Tuesday hinted of plans to offer dollar forwards to be delivered within two months to offset a backlog of matured foreign exchange obligations to manufacturers, airlines, fuel importers and agriculture businesses.