The naira continued on its four-day winning streak against the U.S. dollar on the parallel market yesterday to close at N480/$, stronger than the N501 to the dollar from the previous day, as the new foreign exchange policy actions introduced by the Central Bank of Nigeria (CBN) forced more currency speculators to sell off the greenback as sell rates fell as low as N460/$.
The buy rate of the dollar also strengthened yesterday to close N470/$, as against the N490/$1 at which it closed on Wednesday.
In all, the naira has appreciated by N39 since Monday when the new FX actions were announced by the regulator.
Also, as part of efforts to sustain dollar liquidity in the market and bridge the gap between the interbank FX and parallel markets, it was gathered that the central bank auctioned another $230 million through forward contracts on the interbank FX market yesterday.
It auctioned $370 million on Tuesday and sold $1.5 million on the spot market.
Commenting on the new FX measures, analysts at Cowry Assets Management Limited said the move by the CBN to increase FX availability to end users has been helped by the recent buildup of Nigeria’s foreign exchange reserves amid increased crude oil revenues.
“Given the improvement in the external sector, we anticipate that the new measures could pave the way for a gradual return of confidence in the foreign exchange market.