Nigeria’s naira to firm against major currency this week as CBN plans another $100m sale
The outlook for the naira may remain positive this week as Nigeria’s central bank said it will sell yet another $100 million at a special foreign currency auction on Monday, July 3, 2017.
This week sales would be the latest in a series of interventions by the CBN that it said had yielded positive results in the forex market. Last week the apex bank intervened in the foreign exchange market with $195 million, including a $100 million special currency auction.
The naira was quoted flat at N368 on the black market on Monday and quoted N306.40 per dollar by commercial lenders at the interbank window. As at close of business last week, the naira was at N366.41 on the investors’ and exporters’ window
In a notice to commercial lenders, the regulator said the dollar auction would be both for spot and forward transactions, which would be settled within the next 60 days.
The central bank has been intervening on the official market in the last few months in an attempt to narrow the spread between rates on the official market and black market. The efforts have since gained some successes as rate at both windows are near convergence.
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The CBN said it has sold over$5 billion since February 2017 when it started the intervention, which saw rates tumbling down from over N500/$ to the current rate of less than N400/$.
Nigeria has at least six different exchange rates including a retail rate set by licensed exchange bureaus, the official and black market rates and a window for investors and exporters where the naira can be traded at rates set freely between buyers and sellers.