Naira weakens further as CBN set to announce new rate

The naira which has firmed 17 per cent since last month due to Central Bank of Nigeria’s dollar sales on the official market, eased by 1.8 per cent to N390/dollar at the weekend, National Daily has gathered.

The naira held its level at 306.35 to the dollar after the CBN sold $1.5m on the spot market. The CBN had on Thursday said it would increase the amount it was offering to the BDCs to $10,000 per member from $8,000, but would announce a new rate on April 3.

Traders said the new rate announcement had created uncertainty and caused the naira to trade weaker on the black market.

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But dollar buffers have started to decline. Traders estimate that the bank has sold more than $1bn in currency forwards since last month to boost liquidity.

The apex bank had on Tuesday set a rate of N362/dollar for the BDC operators to sell the greenback to customers, an 11 per cent rise over the 399 it set in January.

The CBN has been selling the dollars on the official market in order to narrow the spread with the black market rate, which was quoted at a record low of N520 per dollar a month ago.

Some analysts believe the CBN may not cut further the N360/dollar rate set for the sale of the greenback for invisibles by commercial banks.

Meanwhile, Nigeria external reserves, which have risen by 16.1 per cent since the start of the year, stood at $30.29bn by March 29, but are still far off their peak of $64bn, hit in August 2008.

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