Naira: CBN sells $40m at N198.50

Nigeria’s central bank banned banks on Friday from reselling dollars bought at its currency auctions to other banks, dealers said, a move aimed at curbing speculation.

The bank had asked commercial lenders to submit their customers’ dollar demand in a special forex sale on Friday, which delayed trading for over an hour.

Two sales were conducted at 198.50 naira to the dollar totalling $40.8 million, Thomson Reuters data showed.

The CBN after the 10 per cent devaluation of the Naira last November had set an exchange band of N160-N176 for the naira, but by selling above the band, the CBN may have sent a message that it may be supporting the worsening position of the currency in the market.

The Naira sells at over N210 at the BDCs

Nigeria’s foreign exchange reserves fell to $33.4 billion as of Feb. 10, a drop of $1 billion over the previous 12 days as the central bank sold hard currency to try to defend the plunging naira, it said on Thursday.

Meanwhile, the central bank said on Friday it will do all it can to meet legitimate dollar demand on the interbank market and not devalue the naira currency, hit by falling oil prices and concern over political stability in Africa’s biggest economy.

Spokesman Ibrahim Muazu confirmed the central bank’s forex sale on Friday and said the bank will continue the forex sale on a “need basis” to satisfy demand in the interbank market and curb speculative attacks, which he said was the reason behind the currency weakness.

“Our target is to stabilize the market in the interest of investors and the economy. We will do everything to ensure that we meet demand,” Muazu told Reuters