CBN Sells $30m to Banks to Defend Naira
The Central Bank of Nigeria (CBN) defended the naira with $30 million in FX sales to authorised dealer banks at a lower spot rate. This was the second auction sale this week, bringing FX intervention sales to $77 billion week to date.
The amount has again proven to be insufficient to have meaningful effects on exchange rate direction. At the forex market auction sales, the Apex Bank sold $30 million to authorised dealer banks at the rate of ₦1,630 on Wednesday. The same day, the exchange rate settled at a similar spot rate.
This suggested the apex bank FX sales on filled daily US dollar shortage in the official window. On Thursday, the effects of the FX auction fizzled out as naira crossed the red line.
The exchange rate plunged to N1675 per US dollar at the Nigerian autonomous forex market on Thursday as demand surged. Earlier in the week, the CBN sold $47 million to banks also at the rate of N1,630 per US dollar.
Last week, the Apex Bank intervened in the forex market three times and sold $148 million to Nigerian banks. The trend suggests that the CBN is likely to conduct another FX auction on Friday to keep the naira exchange rate under control.
In October, the naira depreciated by about 8%, bringing the year-to-date decline to 45.86% in the official market, TrustBanc said in a note. In the parallel market, the naira has lost 30.37% from the beginning of the year to date. #CBN Sells $30m to Banks to Defend Naira Ghana to Import Petroleum from Dangote Refinery – Official
