As CBN Pumps Another $221m, Analysts Expect USD’s Slide to N400

As part of efforts to sustain its defense of the naira, the Central Bank of Nigeria (CBN) on Thursday sold $221,371,218.04 to banks in its second special wholesale intervention forwards since the new foreign exchange (FX) policy actions were announced a week ago.

A breakdown of the amount sold by the CBN showed that it auctioned $162,850,000 to 10 banks in a transaction with 30 days tenor, while six banks participated in a separate auction with 60 days tenor in which $58,521,217.04 was sold.

Owing to the new measures introduced by the central bank last week, the naira which had fallen to as low as N525/$ penultimate Friday, strengthened remarkably by N75 in just five days, to close at N450/$ last Friday.

With improved FX liquidity, some market analysts were cautiously optimistic yesterday that the naira could climb to N400-N425 to a dollar in the coming days.

Should this happen, the CBN would meet its objective of closing the gap between the interbank and parallel market rates.

Thisday, February 27, 2017

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