The Central Bank of Nigeria on Friday said it would offer dollar forwards to offset a backlog of foreign exchange obligations for manufacturers, airlines and fuel importers.
The dollars will be sold directly to companies and are strictly for matured letters of credit obligations related to specific sectors, Reuters reported.
“Authorised dealers ’ accounts with the central bank will be debited in full for the naira equivalent of the dollar bid amounts on a spot basis ,” the CBN said in a statement to commercial lenders .
” The central bank will settle the bids through forward settlements of seven to 45 days ,” the apex bank added . It did not specify the amount of dollars to be sold .
The CBN has been intervening on the official market to try to narrow the naira currency’ s spread with the black market rate.
The naira was quoted at 315 per dollar on the official market on Friday, and at 385 on the black market. It traded at 410 a week ago .
The CBN has sold around $4bn since it started intervening in the currency market in February , according to analysts , who have expressed doubts that the cash injections can be sustained.
The apex bank had on Tuesday reduced the amount of paperwork that Small and Medium -scale Enterprises must provide to buy dollars as part of an effort to improve liquidity and attract them away from the black market.
Meanwhile, the interbank lending rate climbed by around 20 percentage points on Friday after the CBN’ s sale of dollar forwards to offset a backlog of forex obligations drained cash from the money market.
The overnight lending rate stood at 50 per cent against 29. 33 per cent the previous day , because commercial banks scrambled for cash on Friday to pay for dollar purchases at a central bank foreign exchange intervention auction targeting certain sectors .
The CBN has been intervening on the official market to try to narrow the currency ’ s spread with the black market rate and this has also put pressure on naira liquidity in the money market, causing the cost of borrowing among banks to jump .
The lending rate among commercial lenders had opened at 70 per cent on Tuesday, but fell to around 29. 33 per cent on Thursday after the injection of cash from matured treasury bills repayment by the central bank boosted liquidity .
“The money market is in repo because of the sales of open market operations ’ treasury bills and funding for special foreign exchange auctions by the central bank, putting the market in a tight position,” one senior currency trader told Reuters .
The naira closed at 385 to the dollar on the black market on Friday.