CBN Strengthens Naira To 196.97/$

The Central Bank of Nigeria (CBN) has against the advice of its predecessor, Sanusi Lamido Sanusi, Emir of Kano strengthened its exchange rate peg slightly to N196.97 to the dollar on the interbank market yesterday, from the mark of N197.00 set two weeks ago, traders said.


Sanusi had asked President Muhammed Buhari to devalue the naira and remove fuel subsidy.
Traders said the regulator had announced the change in currency peg via a message, making this the 10th adjustment since the bank introduced tight currency controls in February.

“The central bank sent a broadcast today advising N195.97/N196.97 as buying and selling rate on the interbank market at its intervention session,” one dealer said.
Traders said a unit of French Total had sold $90 million to some lenders at the interbank market, but the effect was minimal as the exchange rate remained fixed. Banks are allowed to buy dollars from local units of oil firms at a margin of two naira above the fixed rate.

The central bank has resisted calls to further devalue the naira in the face of a plunge in vital oil revenues. It devalued the currency last November and later pegged the exchange rate in another de facto devaluation.
But the 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 bureau de change operators as part of efforts to support the naira and narrow the gap between the official and parallel foreign exchange markets.

Credit: Leadership