CBN increased FX sales with $543mln, 元63 mln to stabilise naira
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The Central Bank of Nigeria (CBN) in its quest to ease the pressure on the naira, boosted FX sales last week, as disclosed on Friday 24th of August 2018.
The lender stepped up dollar sales in the week under review after it auctioned the U.S. and Chinese currencies a week before in a bid to alleviate shortages of the naira.
The apex bank on Friday said in a statement that it sold a total of $543.22 million on the interbank market and another 63.21 million yuan ($9.20 million) to settle letters of credit denominated in the Chinese currency via spot and forward contracts.
“The bank remained committed to maintaining the country’s external reserves to safeguard the international value of the naira,” Isaac Okorafor, central bank spokesperson said in a statement.
The central bank periodically sells between $200 million and $300 million when it enters the interbank market but last week Thursday it sold $210 million and $323.22 million on Friday after a dollar auction the week before, the bank said.
Meanwhile, the apex bank had two weeks ago asked lenders to submit bids for the Chinese yuan, in what will be the second auction of the currency since the central bank agreed a swap with the People’s Bank of China in May to boost trade between the two countries and cut reliance on the dollar.
However, dollar liquidity has been shrinking as a result of capital reversals after the U.S. central bank started to raise interest rates this year.
Meanwhile, the naira traded weak at 364 per dollar and for investors last week it traded within a range of 362 to 363. While on the official market, supported by the central bank, it was sold at 306.10.
The central bank said the naira was trading at 360 per dollar at exchange bureaus and the yuan sold for 53.17 naira.
Although, traders had disclosed that the little quantity of hard currency sold by local exporters was unable to meet demand, as importers bided repeatedly to try to fill their request.
The central bank however linked the relative stable exchange rate to its interventions as well as higher global oil prices.
Endurance Okafor