Naira firms to N485 against dollar as CBN auctions $230m forex

The Nigerian naira on Thursday strengthened against the US dollar, gaining N10.00k to close to a record high of N485/$ since the Central Bank of Nigeria (CBN) introduced the wholesale intervention forward in the foreign exchange market.
BusinessDay investigations revealed that black market operators at the Lagos International Airport were confused and reluctant to sell and buy dollars, following the new foreign exchange policy.
In some other parts of Lagos, such as  Festac, there was dollar liquidity as traders sold at N485 compared to N495 per dollar sold on Wednesday at the parallel market.
At the inter-bank spot foreign exchange, the local currency weakened slightly to close at N305.50 per dollar as against N305.35k it has traded for more than two weeks.
The CBN was said to auction $230 million in forward contracts on the official market on Thursday, after selling $370 million this week to boost dollar liquidity and help narrow the gap between the official and black market rates.
The Apex bank also sold $1.5 million on the spot market to help keep interbank rates at 305.50 per dollar ,according to Reuters.
Confirming this to BusinessDay, Isaac Okorafor, acting director, corporate communications department at the CBN, said the process is on-going and has not been concluded.
At the money market, the overnight inter-bank rates and the Open Buy-Back (OBB) rose to 133.33 percent and 111.67 percent respectively after the lenders submitted their bid for the $230 million auction.
The CBN on Tuesday carried out wholesale interventions in the interbank forex market by providing a total sum of $370.9 million to 23 banks to meet the visible and invisible requests of customers.
A breakdown of the forwards indicates that $216,465,671.02 was for 30 days, while $154,345,139.77 is for 60 days. The CBN also on Tuesday, February 21, 2017, made spot sales of $1.5 million to four banks, totaling $6 million. The Bank also offered $41 million for sales out of which $35 million was taken up for the payment of school fees, medical bills and personal and business travel allowances.