In its drive to curb the depreciating value of the naira, the Central Bank of Nigeria in August sold a total of $3.68bn to authorised foreign exchange dealers.According to the regulatory bank, the sum represents an increase of 53.2 per cent and 11.6 per cent over the level in the corresponding period of 2010 and the preceding month respectively.A source with the bank, who pleaded not to be named because he was not authorised to speak on the subject, told our correspondent on Friday that the increase of $426.88m over what the bank sold in July was largely due to the banks resolve to maintain its policy of keeping the local currency within a targeted band."You are aware of how demand for the dollar has surged in recent times and how the CBN has been intervening to sustain the naira, so the increase in forex sales to dealers was still part of measures adopted to strengthen our currency," the source said.As part of money tightening measures employed by the apex bank, it had stressed that it would maintain the naira within a three per cent band below or above N150 to the dollar.However, following pressures on the local currency as a result of the ever increasing demand for the greenback, the bank had last Monday said that it would review its target band in a couple of days, stressing that depending on where the exchange rate settled, it might move its midpoint to N155/156 to the dollar.Analysts in the financial sector had noted that the apex bank often use the countrys forex reserves to help sustain the local currency, a development which deplete the reserves over time.The Chief Executive Officer, Economic Associates, Dr. Ayo Teriba, told our correspondent, "When the global financial system is liquid, then you as a country can keep your gains from oil sale or other income resource as foreign reserves. But in a situation where most nations of the world are crying about their respective economy, it would be difficult to keep resources as foreign reserves."Meanwhile, the bank in its August 2011 report noted that the average naira exchange rate against the dollar at the Wholesale Dutch Auction System depreciated at both the WDAS and inter-bank market segments from the preceding months levels."However, it appreciated at the bureaux-de-change segment of the market," the bank said.The bank also noted that forex inflow and outflow through the CBN during the period under review were $4.32bn and $4.23bn, respectively, adding that the development resulted in a net inflow of $0.09bn.
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