Naira gains N3.40k over dollar as CBN intervenes at forex market

The Central Bank of Nigeria’s (CBN) intervention at the foreign exchange market has strengthened the nation’s currency as naira on Monday gained N3.40k against the US dollar at the inter-bank market.

The CBN on Monday offered $200 million but sold a total of $198.97 million to some deposit money banks at the Retail Dutch Auction System (RDAS). Aside foreign exchange auction at RDAS, the apex bank also intervened by selling dollar to some banks which helped to lift the local currency.

Consequently, after trading on Monday naira closed at N173.70/$ as against N177.10/$ Friday last week, according to data obtained from the Financial Markets Dealers Quotation (FMDQ).

The central bank is widely expected to keep interest rates on hold at the end of a two-day meeting today despite pressure for an increase to support the naira which is down almost 11 percent this year, according to Reuters report.

The price of oil, Nigeria’s main export, has plunged, adding to worries about government finances. Political tensions ahead of elections in February and a violent insurgency waged mostly in the North East by the Islamist group, Boko Haram, have also contributed to concerns about stability in Africa’s biggest economy and number one crude oil producer.

The central bank has spent billions of dollars of reserves intervening to prop up the currency this year but it closed at N173.70 to the greenback on Monday, gaining 1.91 percent from its previous close of N177.10.