Naira drops to N197/$1 at interbank market

16 October 2015, Lagos – The Central Bank of Nigeria (CBN) weakened its exchange rate peg slightly to N197 naira to the dollar on the interbank market yesterday, from N196.98 it set on Monday.

Naira in free fall.Traders said the regulator sent a message announcing the adjustment, which is the ninth since the bank introduced tight currency controls in February.

“The central bank sent a broadcast today advising us on its buying and selling rate on the interbank market at its intervention session,” one dealer told Reuters on Thursday.

The central bank has resisted calls to further devalue the naira in the face of a plunge in oil revenues. It devalued the currency last November and later pegged the exchange rate in another de facto devaluation.

But the central bank has continued to intervene at the interbank market periodically to provide forex liquidity support for the local currency. It also sells dollars twice-weekly to the bureau de change operators as part of bids to support the naira and narrow the gap between the official forex and parallel market. The local currency traded at N225 to the dollar on the parallel market on Thursday, slightly weaker than N224 traded on Monday.


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