CBN boosts sales of dollars to strengthen Naira

The Central Bank of Nigeria, CBN, said on Monday it sold $80 million to retail customers and another $100 million in currency forwards to increase dollar liquidity and support the naira.

Nigeria has been running short of dollars as oil revenues have fallen along with the price of crude. That has weakened the local currency on the black market, where it trades far lower than the official interbank rate of N305 to the dollar.

Reuters reports that the central bank said in a statement it sold $80 million to cover consumer demand and another $100 million via the wholesale forward market. Traders said banks offered central bank dollars to customers at N375.

The central bank, under pressure from the government to narrow the gap between the official and black market rates, has effectively devalued the naira for consumers, offering to sell them dollars at about half the premium the black market charges.

The naira, which had weakened to N520 to the dollar on the black market, firmed to a more than three-months high of 460 on Friday, after several interventions by the central bank on the official market.

Central bank spokesman Isaac Okoroafor said the central bank would ensure a steady supply of foreign exchange to the market. Its efforts, he said, were starting to narrow the black market rate.

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