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Nigeria’s naira, yesterday, rose against the dollar, heading for its first gain since starting to trade without a peg three days ago, as the central bank sought to stabilize the market by selling dollars.
According to Data obtained from the Bloomberg terminal, the naira rose 0.7 percent to 282.5 per dollar by 5 p.m. in Lagos, the commercial capital of Africa’s largest economy, after earlier dropping as much as 0.5 percent.
The currency traded on high side at 286 naira to a dollar and low at 280.5 naira to the dollar at the inter bank market yesterday.
The regulator has intervened in the market by selling foreign exchange since it ended the currency’s 16-month fix of 197-199 per dollar on Monday. It sold $4 billion in the spot and forwards markets that day to clear a backlog of demand for hard currency, and followed that with about $100 million of sales on the spot market on Tuesday.
“The market expects the central bank to continue to intervene on a daily basis for now as it is easily the only source of dollar supplies,” Sewa Wusu, head of research at SCM Capital Ltd., said. “Foreign direct investment and portfolio flows are yet to start flowing in as investors wait on the sidelines to watch for liquidity, price discovery and stability.”
According to Data obtained from the Bloomberg terminal, the naira rose 0.7 percent to 282.5 per dollar by 5 p.m. in Lagos, the commercial capital of Africa’s largest economy, after earlier dropping as much as 0.5 percent.
The currency traded on high side at 286 naira to a dollar and low at 280.5 naira to the dollar at the inter bank market yesterday.
The regulator has intervened in the market by selling foreign exchange since it ended the currency’s 16-month fix of 197-199 per dollar on Monday. It sold $4 billion in the spot and forwards markets that day to clear a backlog of demand for hard currency, and followed that with about $100 million of sales on the spot market on Tuesday.
“The market expects the central bank to continue to intervene on a daily basis for now as it is easily the only source of dollar supplies,” Sewa Wusu, head of research at SCM Capital Ltd., said. “Foreign direct investment and portfolio flows are yet to start flowing in as investors wait on the sidelines to watch for liquidity, price discovery and stability.”
