CBN to Fund $697m Forward Contracts Friday, Naira Pressure to Ease – THISDAY

Obinna Chima

The Central Bank of Nigeria (CBN) will today fund the one-month forward contracts of $697 million on the interbank FX market, effectively improving dollar liquidity in the market, as the accounts of customers that hedged against the dollar through their banks last month will get their accounts credited.

Sources in the CBN confirmed that there would be improved availability of dollars today, thus easing pressure on the naira which fell to its lowest level yesterday since the guidelines were revised last month for trading on the interbank FX market. The naira closed at N310.43 to a dollar yesterday, compared to N294.24 to a dollar from the day before.

Financial market dealers attributed the development to scarcity of FX since the CBN decided to stop its intervention and all the currency to be truly market-determined.

But on the parallel market, the naira did not budge, as it remained unchanged at N375 to a dollar yesterday.