By Nse Anthony-Uko, with agency reports
ABUJA – Nigeria’s Central Bank of Nigeria (CBN) auctioned $230 million in forward contracts on the official market on Thursday after selling $370 million this week to boost dollar liquidity and help narrow the gap between the official and black market rates, traders said
The bank also sold $1.5 million on the spot market to help keep interbank rates at N305.50 per dollar. On the black market the naira firmed to 490 after opening at N505, traders said.
The Naira had firmed 1.1 per cent to N510 to a dollar on the black market and BDCs, on Wednesday traders said, after the CBN started supplying dollars for retail transactions in a bid to narrow the spread with the official exchange rate.
Most BDCs were showing only offers to sell at 510 with no bids, having sourced dollars privately at peak rates of N 520 per dollar. The naira was quoted at N305.25 per dollar on the official market. The CBN stepped up dollar sales on the interbank currency market on Tuesday, a day after it effectively devalued the naira for retail currency sales.
The CBN said, as part of its efforts to alleviate the sufferings experienced by Nigerians, who source forex for school fees, medicals and personal traveling allowance (PTA), it has decided to fund banks directly with additional forex to satisfy their obligations.
Preparatory to providing the additional forex, the CBN had, last Thursday, pegged the exchange rate for payment of the school fees, and personal travel allowance (PTA) and medicals at rate not exceeding 20 per cent above the official rate on the interbank. According to CBN spokesman, Isaac Okorafor: “The Central Bank of Nigeria has taken a decision to directly fund banks with additional foreign exchange to be able to take care of some personal travel allowance, school fees and medical payments. With that, we have tried to set an exchange rate for those transactions at 20 per cent above the interbank rate.”