The naira on Wednesday gained significantly against the United States dollar as it settled at N501 to the dollar, stronger than N515/$ from the previous day and N525/$ on Monday.
The significant appreciation of the local currency may have been made possible via the new foreign exchange policy actions introduced by the Central Bank of Nigeria (CBN).
It is also understood that the buy rate for the greenback crashed on the parallel market yesterday to below N490 to the dollar, as foreign currency speculators who had held on to the dollar for several weeks rushed to sell off the currency in the wake of renewed confidence in the CBN’s ability to meet demand on the interbank market.
Global ratings agency, Fitch Ratings, on Wednesday averred that the new policy actions announced by the CBN, might ease some of the severe foreign currency liquidity pressure faced by banks in the country, This Day reports.
The CBN also indicated its intention to increase intervention in the FX interbank market to increase supply and reduced the maximum waiting time for banks to take delivery of foreign currency through its forward sales contracts to 60 days from 180.
The first of these forwards amounting to $500 million was offered by the central bank on Tuesday, but 23 banks were only able to buy $371 million in one-month and two-month forwards.