Naira Falls Against Dollar at Official Market

• Naira Falls Against Dollar at Official Market

The naira weakened for the second consecutive session on Tuesday after the Central Bank of Nigeria sold the United States dollar at its highest level ever on the official interbank market.

Traders said the CBN sold $1.5m at N305.75 per dollar. Commercial lenders then resold dollars at a 0.50 naira margin, leaving the naira at 306.25 at the close of the session, according to data from FMDQ OTC Securities Exchange.

The Federal Government unveiled a sweeping economic recovery plan last week that included the relaxing of foreign exchange restrictions with a view to achieving a market-determined regime. The central bank later said it would not allow the naira to float freely.

The naira was quoted at 453 per dollar on the black market on Tuesday, firmer than 455 per dollar its previous close, according to Reuters.

The CBN said on Tuesday it would sell $150m in currency forwards on the interbank market through commercial lenders.

The central bank, which has been intervening on the official currency market over the past two weeks, told lenders that Tuesday’s sale would be settled within 60 days.

The naira fell to 306 per dollar on Monday from the 305.50 level it had traded since last year after the central bank’s intervention on the spot market.

The currency fell to a record 520 per dollar in unofficial trading last month before strengthening to 460 this week, 32 per cent weaker than the official rate.