The naira rose to 380 per United States dollar on the parallel market on Thursday, up from 390 it closed on Wednesday.
This came hours before the Central Bank of Nigeria sold $20,000 each to Bureau De Change operators. The CBN had sold $20,000 to each of the BDCs earlier this week to boost liquidity.
The central bank sold its usual $1.5m on the spot market on Thursday at 305.50 per dollar, according to Thomson Reuters data.
According to analysts, the CBN has sold around $4bn since it started its aggressive intervention on the forex market in February.
Analysts, however, doubted whether the CBN could sustain the trend.
“Until we see a freely traded naira a la Egypt, Nigeria is fighting with one hand tied behind its back,” the Head of Nairobi-based Rich Management, Aly-Khan Satchu, told Reuters.
The central bank has been intervening on the official market to try to narrow the currency’s spread with the black market rate. On the official market, the currency was quoted at 306 per dollar on Thursday.
The spread has become far narrower, thanks to the central bank intervention. The naira was 520/dollar on the black market in February after the apex bank devalued the naira for retail customers to 375.
The Minister of Finance, Mrs. Kemi Adeosun, said liquidity was improving on the currency markets on dollar injection, thanks to rising oil prices, adding that government was harmonising fiscal, monetary and trade policies to boost growth.
“Higher oil prices alone are insufficient to explain the central bank’s aggressive interventions over the past few weeks and (oil) production seems to have ramped up slowly over the first quarter of this year,” a senior economist at the NKC in Johannesburg, Cobus de Hart, said.
He said, “Whether the central bank used funding such as external debt-related inflows to intervene in the forex market remains to be seen, but in general, we are not convinced that the regulator will be able to sustain this trend indefinitely.”
The President, Association of Bureau De Change Operators, Aminu Gwadabe, said the increase in currency sales to the BDCs would help take out pressure from the black market, adding that some importers were no longer bringing forward dollar demand as liquidity continued to improve.