CBN Plans Forex Intervention For Banks

The Central Bank of Nigeria is planning to pump foreign exchange in to the market this week as it told commercial banks yesterday to fund their naira accounts to be able to participate in a currency intervention on the interbank market on Thursday.
Traders citing a message from the apex bank told Reuters that the CBN sold between $100 million and $150 million at its intervention last Thursday, but did not mention how much it will be selling on Thursday.
Although the value of the naira has remained static at N199.1 to the dollar at the interbank market since the beginning of the year, overnight rates which was 0.98 on Monday jumped to 3.4167 at the close of business yesterday.
Last week, overnight lending rates had risen from one per cent on Monday to 9.2917 per cent by Wednesday before dropping to 1.0467 per cent by the close of business on Thursday. Loner tenured lending rates had remained relatively stable.
Last month the bank banned dollar sales to retail bureaux de change outlets, sending the naira to record lows on the black market and later stopped daily sales to the interbank market, all to conserve reserves which are down to an 11-year low.
The naira traded around a pegged rate of 198 to the dollar on the official interbank market on Tuesday but was quoted at 305 on the black market. 

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