The expectations of many foreign exchange users were not met as pressure on the naira
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persisted on Wednesday even after the Central Bank of Nigeria (CBN)’s intervention.
The CBN on Wednesday offered about $200m and sold same to some deposit money banks at the rate of N168/$ at its twice weekly Dutch Auction System (RDAS).
However, the naira on Wednesday depreciated by N2.30k/$ or 1.2 percent against the dollar at the inter-bank market foreign exchange market.
After trading on Wednesday, the local currency closed at N192.40k/$ compared to N190.10k/$ traded the previous day at the inter-bank market, data from Financial Markets Dealers Quotations (FMDQ) has revealed.
At the parallel market and Bureau De Change segment, naira remained stable at N210.50k/$ and N209/$ respectively.
The CBN had on Tuesday announced its move to sell an additional $30,000 to interested BDCs in a move to shore up liquidity in the foreign exchange market as naira continues to face intense pressure on excessive dollar demand.
The bank has been intervening almost daily in the inter-bank market since the start of the year as liquidity is very low due to depressed foreign investment as Nigeria’s economy has been hit by plunging oil prices. That has sent the naira to record lows.
The naira has remained under pressure as the price of oil, Nigeria’s main export has plunged. The currency has stayed well below a trading band of 160 to 176 to the dollar, set after the central bank devalued the naira by 8 percent in November, Reuters report.
Intervention to support the naira has also been aimed at curbing speculation.
Dealers said Italian oil company ENI was also in the market on Wednesday, selling $24 million to some banks.
