Naira gains as CBN resumes forex auction with $178m sales

The naira on Monday began the new year with a gain of N1.00k against the US dollar at the inter-bank market as the Central Bank of Nigeria (CBN) resumed foreign exchange auction at the Retail Dutch Auction System (RDAS) after the festive holidays.

The CBN on Monday offered a total of $200 million but sold a total of $178 million to some deposit money banks that participated at the RDAS at N168/$.

Consequently, after trading on Monday, the local currency closed at N185.10k/$ as against N186.10k/$ on Wednesday at the inter-bank market, according to data from Financial Markets Dealers Quotations (FMDQ).

At the parallel market segment, naira also gained N1.00k against the dollar as it closed at N190/$ compared to N191/$ on Friday last week.
The year 2014 ended on Wednesday with a depreciation of naira by N1.50k/$ or 0.81 percent against the US dollar at the inter-bank foreign exchange market.

With a 13.5 percent fall in 2014, analysts expected the naira pressure to continue in the new year as the price of oil continues to drop.

While the CBN sustained its efforts to maintain the stability of the naira exchange rate at the RDAS window, a considerable degree of weakening was recorded at both the inter-bank and bureau de change (BDCs) segments, Godwin Emefiele, governor of CBN had said.

The nation’s currency in 2014 slide N21.22k/$ or 13.26 percent to N181.18/$ from N159.96/$ at the inter-bank market, according to a report by Asset Management Limited.

A review of naira performance for 2014 revealed that the local currency depreciated by 9.30% (or N14.30) at the official market segment to N168.00/USD as at December 24, 2014 (from N153.70/USD).

At the BDC and parallel market segments, the foreign exchange rate band depreciated by 11.11% (or N19.00) and 10.40% (or N18.00), respectively, to N190.00/USD and N191.00/USD (from N171/USD and N173/USD).

Consequently, the spread between the RDAS and inter-bank market was N17.50, while the spread between the RDAS and the bureau de change market was N20.50.