• Friday, June 21, 2024
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Naira recovers from record low as CBN steps in

CBN’s new FX rules to shore-up dollar supply, stabilise naira

The naira recovered from a record low to end trading unchanged on Thursday, after the central bank sold dollars to prop up the local currency, dealers said.

The naira closed where it opened on Thursday, at 192.70 to the dollar. The currency had fallen to a record low of 194.65 shortly after the market opened, then recovered as the central bank stepped in. It had closed within a range of 190.10 to 192.40 the day before.

The central bank has been intervening almost daily in the interbank market since the start of the year. The naira has suffered as falling oil prices weaken Nigeria’s economy, causing foreign investment to dwindle.

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Dealers say dollar demand is significant on the interbank market, most of it from importers. Nigeria imports around 80 percent of what it consumes.

The naira has been trading outside a target of 160-176 to the dollar that the central bank set following a devaluation in November. It has continued its slide to record lows despite the bank’s interventions.

Last month, the central bank doubled the amount it sells at weekly auctions to bureau de change agents to $30,000, to increase dollar liquidity. The bank said on Tuesday it would again sell $30,000 to each of more than 2,500 bureau de change operators on Friday.