CBN, oil majors’ dollar sales strengthen naira

The nation’s currency, the naira, on Tuesday gained again against the US dollar by N1.52k/$ or 0.82 percent at the inter-bank market.

This is following the sale of the greenback by the Central Bank of Nigeria (CBN) and three oil companies on Monday.
After trading on Tuesday, the local currency closed at N183.58k/$ compared to N185.10k/$ the previous day, according to data from Financial Markets Dealers Quotations (FMDQ).

The CBN on Monday offered a total of $200 million but sold a total of $178 million to some deposit money banks that participated at the RDAS at N168/$, while three oil majors sold some amount of dollar too.

Consequently, naira on Monday gained N1.00k against the US dollar at the inter-bank market, thus beginning the year with appreciation.

Kunle Ezun, analyst at Ecobank Nigeria, acknowledged by phone that the local currency was strengthened by dollar supply by the CBN and the three oil companies on Monday as there were no sales on Tuesday.

Currency dealers admitted that the various measures put in place by the CBN may have started yielding result. The apex bank had introduced some measures to maintain stability of foreign exchange. The latest being the barring of commercial banks from holding dollars, aimed at stamping out speculations.

“We do not want speculators in this market any longer,” Godwin Emefiele, CBN governor had told Reuters. “The banks are not supposed to hold any funds of their own. They are supposed to buy and sell currency on behalf of customers.”

 However, analysts had said regulatory interventions against “speculators” were unlikely to solve Nigeria’s basic problem — too few dollars coming in from oil sales.