CBN to sell $100m at special forex auction as Naira holds steady

The Central Bank of Nigeria will sell $100 million at a special foreign exchange auction on Wednesday, 28^th of June as the local currency held steady in all segments of the foreign exchange market.

In a notice to commercial lenders, the regulator said the dollar auction would be for spot and forward deals which would be settled within the next 60 days.

The CBN has been intervening on the official market in the last few months to try to narrow the spread between rates on the official market and black market. It has sold over $5 billion since February.

The local naira currency came close to converging at the investor foreign exchange window and black market on Friday, with analysts attributing the development to increased dollar liquidity in the forex market.

The naira was quoted unchanged at 368 per dollar at the black market on Wednesday, while commercial lenders are yet to put up a quote on the interbank market. The naira closed at 305.85 to the dollar on the interbank window on Friday.

At the investor forex window, the market regulator FMDQ OTC Securities Exchange had not provided a fresh quote as at 0948 GMT on Wednesday.

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The naira was quoted at 367.83 per dollar on the window on Friday, the last trading day before the two-day public holiday on Monday and Tuesday to mark the Islamic Eid al-Fitre holiday.

Nigeria is contending with a currency crisis brought on by low oil prices, which has tipped Africa’s largest economy into recession and created chronic dollar shortages.

At the moment, Nigeria has six different exchange rates, including a retail rate set by licensed exchange bureaus, official and black market rates and a window for investors where the naira can be traded at rates set freely between buyers and sellers.