Naira Firms As CBN Settles Backlog Forex Demand For Airlines, Fuel
The Nigerian Naira firmed against the US Dollar at the investors and export exchange window as well as inter-bank spot market. This is coming after the Central Bank of Nigeria (CBN) was said had planned to auction an undisclosed amount of dollars on Wednesday through book building to settle a backlog of demand for airlines, fuel and raw material imports.
The Naira gained N1.18k to close at the rate of N380.89k per dollar on Wednesday from N382.07k on Tuesday at the investors and export window.
At the inter-bank foreign exchange, the local currency appreciated marginally by N0.05k, closing at N305.60k per dollar as against N305.65k per dollar the previous day, data from FMDQ has revealed.
However, the local currency weakened at the black market, losing N5.00k at the end of the trading day on Wednesday to close at N390 per dollar compared to N385 per dollar quoted the previous day.
Currency dealers said on Wednesday that the central bank had asked lenders to bid for hard currency for specific sectors in efforts to improve dollar liquidity.
It said a cut-off rate at the auction would be applied at the marginal rate and that obligations due on fuel imports must have matured before Jan. 31 to qualify for the intervention.
The bank has been intervening aggressively since February to try to narrow the spread between the official and black market rates and has sold more than $4 billion. In theory, greater liquidity should lead rates to converge.