CBN losing battle to keep Naira strong

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The Central Bank of Nigeria’s battle to keep Naira strong saw Nigeria’s foreign reserves fall by $604.1 million in November.

Despite the huge depletion of Nigeria’s foreign reserves, the Naira still remains steady against the US Dollar as it maintained stability for another day at the Investors and Exporters (I&E) segment of the foreign exchange (FX) market.

Data from FMDQ securities on Wednesday showed the Nigerian currency traded flat at N415.07/$1 for the fourth straight trading day.

Data on Wednesday showed a rise of $223.18 million from $152.98 million achieved a day earlier, indicating an increase of $70.2 million or 45.9 per cent.

READ ALSOCBN spends $2.1bn in seven months to defend Naira

But at the interbank segment of the market, the Nigerian currency further depreciated on Wednesday by 4 kobo against the American Dollar as it traded at N411.7/$1 compared to N410.66/$1 of the preceding day.

The local currency, however, appreciated by 89 kobo against the Pound Sterling to trade at N548.43/£1 in contrast to N549.32/£1 it closed on Tuesday.

Equally, the Naira gained N1.03 against the Euro to settle at N466.25/€1 compared with N467.28/€1 it traded the previous trading session. Black Market traders however continued to sell dollars at N563 on Wednesday.

According to figures obtained from the Central Bank of Nigeria, the reserves dropped from $41.79 billion when it opened the month to $41.18 billion as of November 30.

A further look at the data revealed that the CBN made withdrawals without adding a single dollar during the month of November.

CBN is the sole supplier of forex in the country and needs the external reserves to meet demands.