08 November 2014, Lagos – The naira appreciated by 2.35 per cent against the United States dollar on Friday after the Central Bank of Nigeria (CBN) sold dollars to prop up the value of the nation’s currency.
The naira closed at N165.90 to the dollar compared with the N169.90 to the dollar the previous day.
CBN Deputy Governor (Economic Policy), Dr. Sarah Alade disclosed to Bloomberg that the central bank intervened in the market to defend the naira after it plunged to an all-time low amid a drop in oil prices.
Alade said: “We are in the market now. We haven’t abandoned the market. We will continue to defend the currency.”
The naira had touched new intra-day lows of N173.02 on Friday amid demand for dollars, partly from foreign investors unnerved by falling oil prices exiting Nigeria and partly from domestic importers worried about the risk of currency devaluation.
Dealers said the central bank sold undisclosed amount of dollars.
“We saw the central bank increase its dollar sales at the interbank market today to counter surging demand and reassure the market of its intention to continue to defend the naira,” one dealer told Reuters.
Traders said the dollar sales by the central bank coupled with flows from the Nigerian National Petroleum Corporation on Thursday further strengthened the local currency.
The central bank on Thursday restricted the sale of dollars to importers of telecoms equipment, power generators and finished products at its foreign exchange auction, funnelling demand towards the interbank market.
– This Day