The naira, on Friday, firmed up against the US dollar at the Nigeria Inter-bank Foreign Exchange (NIFEX) market following the intervention of the Central Bank of Nigeria (CBN) through the sale of foreign exchange to the tune of $654.545 million last week.
The naira closed at N164/$ on Friday compared to N164.71/$ traded on Tuesday, data from Financial Markets Dealers Quotation (FMDQ) revealed.
Interestingly, the naira started the week on a positive note. On Monday, it strengthened slightly against the US dollar following increased supply of the greenback by the CBN and two oil majors.
This trend continued on Tuesday at the inter-bank market as it gained N0.28k to close at N164.71/$.
At its bi-weekly Retail Dutch Auction System (RDAS), the CBN offered a total of $400 million each, on Monday and Wednesday, but sold $268.2 million on Wednesday after selling a total of $386.303 million on Monday to 18 deposit money banks at the rate of N155.74/$.
This falls in line with analysts’ prediction that naira would stabilise last week following sustained naira defence policy of the monetaryauthority.
However, analysts believe the lingering decline in the value of the naira and depleting foreign reserves may continue for some time pending when the activities of hard currency speculators are challenged.
It was revealed that some expatriates, mainly Chinese, have made it a habit to buy off the US dollar allocated to Bureaux De Change operators (BDCs) weekly for subsequent sale to end users at the end of every CBN’s RDAS auctions.
It was reported that the practice has been going on since the reintroduction of RDAS as the banking halls of most commercial banks in urban areas, especially Lagos and Abuja, have become market place of this illegal brisk business.