Naira gains further after CBN dollar sale to banks

The naira on Monday gained further at the official foreign exchange (FX) market after the Central Bank of Nigeria (CBN) conducted its second retail Dutch auction, selling $815.36 million to 26 banks on Friday.

After trading on Monday, the naira recorded the fourth-straight gain of 0.20 percent as the dollar was quoted at N1,570.99 compared to N1,574.20 quoted on Friday at the Nigerian Autonomous Foreign Exchange Market, (NAFEM), data from the FMDQ Securities Exchange Limited indicated.

The dollar supplied by willing buyers and willing sellers declined by 23.73 percent to $246.44 million on Monday from $323.11 million recorded on Friday at the NAFEM.

According to the FX market summary, the intraday high printed at N1,593 on Monday compared to N1,601 closed on Friday. The intraday low gained N20 to close at N1,500 on Monday as against N1,520 on Friday.

The local currency steadied at N1,600 per dollar on Monday. It however represented a N5 loss relative to N1,595 closed on Thursday on the parallel market, popularly called black market.

The CBN on Friday settled a total of $815.36 million out of $1.19 billion foreign exchange demand by end users funded by 26 banks at N1,495 per dollar.

The CBN disclosed this in a statement containing the summary of the retail Dutch auction and signed by Omolara Omotunde Duke, director financial markets Department of the CBN.

The statement said after the coalition, the Committee of Governors of the CBN approved a cut-off bid of N1495.00/US$ with the total successful bids of $815,362.006.30. This represents 6.95 percent below the $876 million sold to 26 banks on Wednesday.

According to the FX market summary the range of successful bids was N1495.00/US$ – N1650.00/US$ across 26 banks. Six banks were disqualified, this included four banks that submitted after the 6-hour submission period stipulated (9:00am-3:00 pm). In addition, two banks did not provide bids in the template supplied.

 “It is hereby emphasised that each end user is allocated foreign exchange at the rate submitted by their bank. The Central Bank of Nigeria settled the retail FX sales to banks on Thursday, August 08, 2024, at T+2. All Accounts not funded by August 08, 2024, do not qualify, the CBN said.