Naira Recovers on Interbank FX Market – Thisday

The naira fell briefly to a new low against the dollar on the official market on Tuesday but rebounded after the central bank pumped $1.5 million into the market to stabilise the battered currency.

The currency weakened to a record low of N375.50 to the dollar earlier yesterday, according to Thomson Reuters data. The central bank later sold around $1.5 million to some commercial lenders, helping the naira to close at N305 to the dollar, traders said.

An official at trading platform FMDQ confirmed a single trade worth $10,000 had been made earlier yesterday, at a rate of N376.63 early on Tuesday but gave no further details.

The central bank said in June it would float the naira but has since kept it stable at around 305 versus the dollar via daily interventions.

Liquidity on the official market remains limited and dealers said importers seeking dollars need to go to the black market, where the local currency traded at N465 on Tuesday, slightly up from N470 a dollar previously.

The CBN had on Monday confirmed that operators in the manufacturing sector were able to access FX valued at over $660 million in the interbank market to source raw materials and spare parts for their firms.

The move by the Central Bank was in line with its earlier promise to ease the FX pressure on manufacturing and agricultural businesses through forward sales under the flexible FX regime.

Details obtained at the weekend indicated that the sum sourced by the manufacturers was to facilitate the procurement of raw materials for agricultural, pharmaceutical, automobile, aviation, plant and machinery, power, telecommunications, and printing, among others.

The acting Director, Corporate Communications Department at the Central Bank, Isaac Okorafor, had explained that the CBN was committed to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage were able to get letters of credit (LCs) to import the required materials for their businesses.