• Tuesday, June 25, 2024
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BusinessDay

Naira loses N2.50k against dollar despite CBN’s intervention

Dollar nears N1,500 as scarcity hits black market
The naira on Thursday slide further against the US dollar losing N2.50k/$ at the inter-bank market in spite of the intervention of the Central Bank of Nigeria (CBN) at the foreign exchange market.
Aside the twice weekly Retail Dutch Auction System (RDAS), the CBN asked 21 commercial lenders to bid for $500,000 each, in an intervention move aimed at providing liquidity to the interbank market and supporting the naira, which has been hard hit by falling global oil prices.
Consequently, after trading on Thursday, the local currency closed at N186.10k/$ as against N183.60k/$ the previous day, data obtained from the Financial Markets Dealers Quotations (FMDQ) indicated.
“I think central bank will try to control any uptrend in the currency, to provide liquidity to the market. But for how long is the question,” one dealer told Reuters.
The central bank was forced to devalue the naira two months ago to halt the slides in its foreign reserves, after the country’s main export commodity, oil plunged. The bank devalued the naira by 8 percent and tightened trading rules to try to curb speculation against the currency.
But the naira has traded well outside its devalued band of N160-N176 – and reserves are still falling.
Meanwhile, Nigeria’s foreign exchange reserves were down 3.2 percent month-on-month from December to $34.51 billion by January 13 because of drawdowns to defend the naira, central bank data showed.
Data from the central bank on Thursday showed the reserves of Africa’s biggest economy have steadily declined, falling 3.2 percent month-on-month from December, when they stood at $35.66 billion.