THE Nigerian currency failed to show a marked improvement against the dollar despite the Central Bank of Nigeria’s (CBN) $543.5 million foreign exchange (forex) sales to dealer banks in September.
A check by The ICIR showed that the naira remained weakened at the N1,500 mark at the official window and the N1,600 mark at the black market.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the official window, the naira opened at1,598.56 to a dollar on September 2 and closed at N1,541.94, appreciating slightly by 3.54 per cent.
However, at the parallel market, otherwise known as the black market, the naira depreciated by 3.70 per cent after opening trading in the month at N1,620 to a dollar and closed at N1,680
On Friday, September 4, CBN revealed that it sold $543.5 million to authorised dealer banks between September 6 and September 30.
According to CBN’s director of the financial markets department, Omolara Duke, the sales occurred over 11 dealing days through a two-way quote at the country’s foreign exchange market.
The spot sales aimed to mitigate market volatility driven by high demand for commodity imports and seasonal foreign exchange needs.
“The FX spot sales were to reduce observed market volatility driven by high demand for commodity importation and seasonal demand for FX. The value dates for all the transactions were T+2,” she said.
Duke added that the apex bank would continue to facilitate forex supply into the foreign exchange market.
The depreciation of the naira has stoked the country’s economy, sparking increasing costs of commodities and companies’ operating costs, fuelling inflation pressure, and worsening Nigerians’ hardships.
Since April, the apex bank has been making frequent interventions in the foreign exchange market to stem liquidity.
However, to check market distortions, eliminate speculative activities and instil transparency in the foreign exchange market, The ICIR reported that the CBN had set out two weeks in November to test-run a new policy, the Electronic Foreign Exchange Matching System (EFEMS).