The Central Bank of Nigeria (CBN) on Tuesday intervened to support the naira after the local currency shed 0.57 per cent from the start of the day’s trade to N163.85 against the dollar, dealers said.
The naira opened at N162.95 before it weakened on strong dollar demand. It recovered to N162.90 after the intervention.
The naira was unchanged at N162.95 at Monday’s market close, after the CBN asked banks for bids to sell the greenback in a move to quell dollar shortages and support the naira.
The local unit opened at N163.05 to the United States currency, and weakened further to N163.50 intraday on strong demand, prompting central bank’s interest, Reuters reported.
Dealers said news of the proposed bid made some lenders to sell dollars in order to participate as the CBN usually sells dollar at a discount to interbank market, helping the naira recover to Friday’s level.
“The central bank called round to get a feel of the market … some banks saw this as a signal that the bank could intervene,” one dealer said.
Dealers said dollar flows has slowed after the Nigerian National Petroleum Corporation, which accounts for bulk of dollar supply on the interbank sold about $300m last week, which failed to lift the local currency.
