Dollar Sales By Oil Firms Boost Naira

Dollar Sales By Oil Firms Boost Naira

By Chidinma Unigwe | Sub Editor on March 26, 2015
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Okechukwu Uzor, Uju Ogubunka, Makinde Wakil
1,000 Naira Notes. The hightest Nigerian currency denomination

NAN – The naira remained steady on the interbank forex market on Wednesday as large dollar sales by oil companies increased liquidity.

This came a day after the Central Bank of Nigeria’s Monetary Policy Committee kept its benchmark interest rate (Monetary Policy Rate) unchanged at 13 per cent.

Reuters reported that the local currency closed at 199.10 to the dollar, the same level it closed over the last one week.

“Dollar sales by some oil companies helped boost liquidity support for the naira and eased pressure on central bank intervention fund,” one dealer said.

The local unit of Chevron sold $100.6m to some lenders, Total sold $53m and Brass LNG sold $600,000, boosting dollar liquidity in the market.

The central bank has in the recent past intervened to steady the naira after it suffered as falling global oil prices hurt the economy, causing foreign investment to dwindle.

Dealers said the effect of the dollar flows could not reflect in the value of the naira because of tight control on exchange rate by the central bank.

The CBN had scrapped dollar auctions last month and directed lenders to channel all transactions through the interbank where banks are only able to purchase foreign exchange if they have a prior order from a corporate customer.

Lenders are also restricted to buy dollar from oil companies at a spread of two naira above the 197-198 central bank’s pegged rate.

The central bank left the benchmark interest rate unchanged at 13 per cent as expected on Tuesday and noted its satisfaction with its attempts to stabilise the naira.

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