Value of Naira Improves on the interbank market

The naira has improved its value when compared to the U.S dollar on the interbank market as of yesterday, after the Central Bank of Nigeria, CBN, and some oil firms sold the dollar directly to lenders to help lift the local currency.

The CBN has been trying to maintain the naira to around 150 naira to the dollar. Governor Lamido Sanusi had said last Monday that the bank would review its target band for the naira in the next few days and depending on where the exchange rate settles may move its midpoint to 155/156 to the dollar.

The naira closed at 157.10 to the dollar on the interbank market, recovering from the N158.18 it touched after the CBN announced its auction results, where it had failed to meet dollar demand.

CBN made some moves to firm up the currency which had initially weakend to N160.90, after having to sell $200 million at N150.25 to the dollar at Monday’s auction. At the auction, the CBN sold $180 million at N150.73 to the dollar, short of the $262.96 million demanded.

CBN sold an undisclosed amount of dollars to some lenders and this helped to correct the lack of dollar supply. As of Tuesday, the unit closed at N157.80.

Shell, Chevron and Agip sold a total of $150 million at the interbank as part of their month end dollar sales, which also helped spur a rebound in the naira.

Dealers disclosed that the naira has been very volatile since the week, trading at around 156-160 levels, and that if more dollar sales do not come in either from the oil firms or central bank, current gains could lose steam.