Naira gains on CBN dollar intervention

The naira firmed 0.12 percent to close at 163.70 against the dollar on Monday, after the Central Bank of Nigeria (CBN) sold dollars directly to lenders on the interbank market to prop up the ailing currency, dealer said.

The local unit eased to around 164.15 naira by midday trade, prompting the central bank to intervene with an undisclosed amount of dollars sold directly on the interbank market, dealers said. The naira closed at 163.90 on Friday.

The currency has been falling for the past three weeks, weakened by the impact of the decline in global oil prices and low offshore inflows into Nigeria’s debt and equity markets.

“We expect the central bank to continue to support … and reduce pressure on the naira,” one dealer said.

At a foreign exchange auction on Monday, the central bank hiked the amount of dollars it offered to sell to $500 million, up from $350 million it has offered in the past quarter.

Dealers attributed the increase in amount sold by the central bank at the twice-weekly auction on Monday to the public holiday declared this Wednesday to mark Nigeria’s independence day celebrations.

Source : BusinessDay

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