Naira strengthens on CBN dollar sale at inter-bank market

The naira on Tuesday firmed against the United States dollar on the inter-bank market, as a result of the direct sales of the greenback by the Central Bank of Nigeria to some lenders.The development, according to dealers, helped to provide liquidity and support for the local currency.The naira closed at N157.80 to the dollar, firmer than the N159.52 to the dollar as at Mondays close.Traders said the CBN sold dollars to some lenders towards the close of the market, where the naira had weakened to around N160.90 to the dollar initially, helping the currency to rebound.The apex bank Governor, Mr. Lamido Sanusi, said on Monday that the bank would review its target band for the naira in the next few days, and depending on where the exchange rate settled, might move its midpoint to N155/N156 to the dollar, compared to its current N150 .Reuters reported dealers to have said that those comments initially put downward pressure on the market.The market initially reacted to the CBN statement that it would review its target band for the currency in the next few days to around N155-N156 to the dollar midpoint, but later strengthen after the regulator intervened in the market, a dealer said.The local currency weakened on both the inter-bank and bi-weekly auction on Monday as demand for the greenback outweighed supply.The CBN announced its resolve to commence the direct sales of the foreign currency at the inter-bank market two weeks ago.According to the apex bank, the direct sales of forex to authorised dealers was aimed at stabilising the naira.The bank said it would intervene in the inter-bank market to either buy or sell, noting that interested dealers in the intervention were to submit their bids and offer rates for specific amounts.In the continuing effort to sustain stability in the foreign exchange market, the CBN shall from time to time intervene in the inter-bank market. This is in addition to (auctions), the bank said in a circular to Deposit Money Banks signed by its Director, Trade and Exchange Department, Mr. Batari Musa.
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