Naira records first daily gain, sells for 284 per dollar

The Naira strengthened against the dollar to close at 281.50 to the dollar on Wednesday, its first daily gain since the Central Bank of Nigeria (CBN) ditched its 16-month old peg on the currency on Monday.

The naira gained on the third day of trading at the new interbank market as it closed at 284.83 against the United States dollar on the back of further intervention from the Central Bank of Nigeria (CBN).

An analysis of the trading data showed that a total of $31 million was sold between N282 and N285 per dollar, was done towards end of the trading for the day, which traders said was occasioned by an intervention from the CBN.

The local currency had on Monday plunged to 288.8 to the greenback compared to a peg of 197 to 199, which the CBN had maintained in the 16 months to June 20 before allowing the naira to float freely.

The CBN intervened on Tuesday to sell dollars at the interbank market after floating the naira failed to attract trading between banks due to liquidity concerns, Reuters quoted traders as saying.

The interbank market quoted the total traded volume at $73 million.

The naira firmed to 281 after the dollar sales, recovering from a low of 287 it touched earlier on Tuesday.

The CBN said it cleared a total foreign exchange demand backlog of $4 billion, with a dollar exchanging for N280 at the foreign exchange market.

Similarly, equity market on the Nigerian Stock Exchange (NSE) gained 705.81 absolute points, representing 2.40 per cent growth to close at 30,127.82 points, while the Market Capitalization gained N242.17 billion, representing 2.40 per cent growth to close at N10.34 trillion.

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