Naira closes at 386/$1, as CBN injects $100m

The Naira, on Monday steadied at 386 per US dollar at the parallel market, as the Central Bank of Nigeria intervened with $100 million at a special wholesale spot and forwards auction in its bid to improve dollar liquidity in the foreign exchange market, so as to further narrow the gap between official and unofficial market rates.

To this end, the local currency is expected to trade within a narrow range in the coming days, due to the injection of dollars into the market.

The local currency was quoted at 486 per dollar on the black market yesterday the same rate it traded over the weekend, stronger than the 490 sold a week ago and 488 exchanged last Thursday.

Commercial lenders quoted the Nigerian currency at 305.6 to a dollar on the inter-bank market, the same rate it closed last trading week.

Business Times, however, observed that the Naira gained a total of four points against the Euro, closing at 418 against 422 traded most during part of last week, while the local currency slightly recorded a point at 495 to a Pound at the unofficial market.

At the Bureau De Change (BDC) window, the Naira was sold at N362 to the Dollar, while the Pound Sterling and the Euro closed at N495 and N423.

But the Nigerian currency, at the Investor and Export window, declare no gains, however, remained at 382.44 a better rate than the opening price of 382.94 at the early hour of Monday.

Meanwhile, forex traders said the CBN’s $100 million dollar auction would be both for spot and forward settlements and have to be backed by customer demand.

In spite of putting the amount of forex sold so far at no less than $4billion since interventions began in February on the official market to try to narrow the spread between the two markets, the nation’s external reserve has recorded a total $4billion increase in 12 months, data collected from the Central Bank of Nigeria (CBN) website has shown.

The reserves as at 4 May, 2017, stood at $30.98 an approximate figure of $31billion, compare to the corresponding year balance of $26.94, indicating a whopping growth of about $4billion.

Despite series of interventions and policy reforms in the Nigerian economy, specifically in the foreign exchange segment, the nation’s external reserves finally touched $31 billion, after gradual but persistent add-ons in eight weeks, representing highest in the last 12 months.