CBN To Continue Naira Tightening

 

The Central Bank of Nigeria says it will continue to support the naira after the currency approached a record low amid declining oil prices and the end of United States monetary stimulus that bolstered emerging-market assets.

Deputy governor, CBN, Sarah Alade, told Reuters that the apex bank will  increase dollar supply in the market.

The CBN had since mid-September used the country’s reserves to sell dollars outside of regular auctions held Mondays and Wednesdays, according to Standard Chartered Plc.

The bank will keep using the auctions and direct dollar sales to banks to preserve the value of the currency, Alade was quoted as saying. The naira strengthened 0.2 per cent to 164.90 per dollar by 2:29pm in Lagos. It earlier weakened as much as 0.8 per cent to 166.42, a record low on a closing basis.

The naira weakened 0.9 per cent this month as Brent crude fell to the lowest level in more than four years last week.

The company said it expected the continuous intervention by the CBN to curtail the downward pressure on the value of the naira through dollar sales to be constrained by the slowdown in the rate of accretion to the nation’s stock of foreign reserves.