Currency gains, trades at N284/Dollar on forex market

Earlier on Tuesday, the Naira had traded at N287 before it firmed to around N281 and ultimately N284 at the close of business.

Nigerian naira notes are seen in this picture illustration March 15, 2016. REUTERS/Afolabi Sotunde/Illustration/File Photo

The Naira gained on the second day of trading at the new interbank market as it closed at N284/Dollar, with further intervention from the Central Bank of Nigeria (CBN).

On the first day of trading with the new float policy direction in place, the CBN made a $500 million intervention at a rate of N280/Dollar, due to uncertainty in the market.

The currency was trading at N288/Dollar prior to the CBN's intervention compared to the previous peg of N197-199, which the CBN had maintained for the past 16 months.

On the second day of trading, the apex bank also intervened to sell Dollars on the interbank market after the new policy direction failed to attract trading between banks due to liquidity concerns, Reuters quoted traders as saying.

According to a Punch Online report, a total of $31 million sold between N282 and N285/Dollar, was done around 12pm, something traders attributed as an intervention by the central bank. $73 million is the total traded volume on the interbank market.

Earlier on Tuesday, the Naira had traded at N287 before it firmed to around N281 and ultimately N284 at the close of business.

On Monday, the CBN said it had cleared up the $4 billion total built-up demand on the forex market. Analysts have come out to say that the CBN will not be able to keep intervening on a large scale to defend the currency.

“They can’t do this for months. We could see further pressure on the naira and it may depreciate to about 300 per dollar,” said Jonas David, emerging-markets analyst at UBS Wealth Management, speaking to Bloomberg.

The Central Bank's forex reserves are currently down to a more than 10-year low of $26.4 billion as the country continues to struggle on the back of extensive drops in the price of crude oil, Nigeria's main earner.

Share your thoughts with me in the comments section below.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Presidential ambition: Emefiele withdraws suit against INEC, AGF

Presidential ambition: Emefiele withdraws suit against INEC, AGF

PDP Primaries: Enugu reports peaceful and transparent elections

PDP Primaries: Enugu reports peaceful and transparent elections

PDP primaries: INEC accused of swapping delegates list in Ogun State

PDP primaries: INEC accused of swapping delegates list in Ogun State

Rep Ogbeide-Ihama picks PDP ticket for Edo South at Senate

Rep Ogbeide-Ihama picks PDP ticket for Edo South at Senate

Buhari commiserates with Kano people over gas explosion

Buhari commiserates with Kano people over gas explosion

Africa loses 300,000 women, children due to smoke from firewood — Adesina

Africa loses 300,000 women, children due to smoke from firewood — Adesina

ASUU: Clark urges education minister to take over negotiations

ASUU: Clark urges education minister to take over negotiations

PDP Primaries: Fayose’s son, aide, others win tickets in Ekiti

PDP Primaries: Fayose’s son, aide, others win tickets in Ekiti

Putin wants to eliminate Ukraine’s identity, says Biden

Putin wants to eliminate Ukraine’s identity, says Biden