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CBN in Fresh Moves to Support Naira

The Central Bank of Nigeria (CBN) made its highest dollar offer year- to- date Monday,  a move foreign exchange market analysts said  was a bold attempt to support the Naira. The regulator sold $400million to the 24 banks that participated at the auction.

The CBN is implementing new measures to support the local currency and save if from further depreciation.

As part of the new control measures, the CBN is working towards a balance between the demand and supply side of dollars at the foreign exchange market.

On the demand side, THISDAY gathered that the regulator is influencing a reduction in the dollar request of banks by asking the operators for lists of their customers buying foreign exchange at the official window, the Wholesale Dutch Auction System (WDAS).

The monetary authority intends to verify dollar claims by banks as to ensure that it is funding only legitimate forex demand and that a check is put on the request of dealers.

On the supply side of the market, as already noted, the CBN has stepped up forex offers to avoid the recurrent situation where relative dollar scarcity forces a drop in naira.

However, although an offer of $400 million was made at the WDAS Monday, it was below the demand of $430million made by the banks. Consequently, the naira lost by some margin.

Naira traded at 150.90 to the dollar at the WDAS yesterday as against 150.68 at the previous auction, indicating a loss by 22 kobo. Dollar offers at the previous auction, last week Wednesday, was $350 million.

The interbank forex market continued to contend with the dollar shortfall at the WDAS, as naira fell to 155.10 to the dollar compared to 154.90 which closed last Friday, indicating a drop by 20kobo.

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