CBN sells Dollars to Traders. The Central Bank of Nigeria (CBN) has sold $1bn on the forward market to clear a backlog of dollar obligations.
CBN sells Dollars to Traders
The Central Bank of Nigeria (CBN) has sold $1bn on the forward market to clear a backlog of dollar obligations in various sectors foreign exchange traders said.
The traders said on Thursday that the dollar sale was made last week. This was described as the largest special auction by the CBN since the Naira peg was removed in June.
CBN has had High Dollar Demands
Outstanding dollar demand before June was about $4bn, when the 16-month-old peg was removed. Efforts to cut dollar demand have been mainly unsuccessful due to low crude oil prices.
Crude sales account for nearly 90 percent of Nigeria’s foreign exchange earnings.
CBN had told banks to prioritize airlines, manufacturing firms, petroleum products importers and agriculture sectors. These sectors were worst hit by the dollar shortage, in the auction.
Traders said the CBN sold 30-day and 60-day forwards at the auction.
The CBN on December 19, instructed commercial lenders to submit their backlog of dollar demand from fuel importers, airlines, raw materials and machinery for manufacturing firms and agricultural chemicals for the special forex intervention.