CBN to Sell $150m at Currency Forward Sale

Nigeria's central bank offered $150 million in currency forwards at an auction on Monday, it said in a statement, part of its efforts to narrow the spread between official and black market exchange rates and improve foreign exchange liquidity.

Traders, citing a notice from the central bank, said settlement will be between one week and 45 days. The sale will be via a wholesale auction to meet forex demand from businesses.

The central bank has been intervening on the official market to try to narrow the spread between the two markets since intervention began in February and has sold about $4 billion, analysts say, a pace they doubt it can sustain.

The central bank also said on Monday it offered $52 million to small and medium enterprises to help them access foreign currency, needed for imports, and $44.2 million for travel and medical fees, among other services.

In a circular cited by Reuters on Monday, the bank also said it will now allow investors to engage in foreign exchange trading at rates the buyers and sellers set, a move it hopes will increase the amount of dollars available.

The president of Nigeria's association of bureaus de change said its group has already started consultations with some foreign investors with a view to increase dollar supply on the parallel segment of the market.

Aminu Gwadabe said retail currency bureaus are trying to attract more foreign capital with the cooperation of the central bank, to boost dollar liquidity and provide support for the local currency.

On the official market, the currency was quoted at 306 per dollar, and at 381 per dollar on the black market.