In achieving convergence at the foreign exchange market, the Central Bank of Nigeria yesterday sold at N306 to the dollar, the second time in the week, after it weakened it on Monday.
The currency sold at N360.27 at the Investors and Exporters window.
The CBN had said it will work towards convergence of rates at all the various foreign exchange markets but at a gradual pace.
Deputy Governor Financial Systems Stability of the CBN Dr. Joseph Nnanna had said the apex bank will not forcibly move rates to convergence.
According to him, the single exchange rate that is being called for can happen organically or inorganically.
According to him, “for us at the CBN, we believe that organic convergence is the way to go. Inorganic convergence, which is forced will always produce an arbitrage and that is one thing we don’t want.
“The convergence is happening organically slowly. We cannot force it. If we force it, it’s going to be an inorganic convergence. Before now, we have bought exchange rate for almost N500 per dollar.”
The naira which has remained stable at N363 at the parallel market for more than three weeks now has hovered around N360 at the I&E window which is also a market determined rate.
At the CBN window, the value of the naira has been on a slow decline as it traded downwards from N305 to N306 in the space of two weeks.
Traders said the move was minor, to signal a change in foreign exchange policy.
The bank last sold dollars at N306 on the spot market in September and had sold the currency as low as N306.65 in July.
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With the approval of the National Assembly for the Federal Government Nigeria to move ahead with plans to borrow $5.5 billion from foreign investors, dollar liquidity in the country is expected to increase.
CBN has maintained its regular interventions at the foreign exchange market to ensure liquidity.
In spite of its consistent interventions, the external reserves had continued to accrue steadily.
The external reserves currently stands at $34.116 billion as at November 10, 2017 according to latest data released by the CBN.
Dollar shortages gripped Nigeria as crude sales, the country’s major revenue earner, plunged at the start of an oil price rout in 2014.
That triggered a recession last year and frustrated businesses, which had to find dollars on the black market as a result.
To try to resolve the currency crisis, the OPEC member state has set up at least different six exchange rates, after devaluing the currency for retail users in February and allowing foreign investors to trade the naira at market-determined rates.
Subsequently, the bank has been intervening with dollar sales almost daily on the spot and forward markets.
It sold $500,000 on the spot market on Tuesday, traders said.
