As the Central Bank of Nigeria (CBN) continues to pump foreign exchange into the forex market to prop the local currency Naira, Nigeria’s foreign reserves have coniitue to deplete.
The financial sector regulator has funneled $380 million in two days in the market through special forex interventions, according to a Reuters report.
Foreign reserves fell to $32.66 billion as at February 16, down by 1.2 per cent from $33.04 billion by February 13.
Foreign reserves have fallen by 5.3 percent from a month ago as huge demand for the greenback continues to depress the naira.
sales by an oil firm were traded at a weaker level than in the earlier sale by the central bank, dealers said.
The bank once again sold dollars below its official band, at N198 to the US currency, and again banned banks from reselling dollars bought at its currency auction to other banks to curb speculation.
All the trades by the bank have been outside its own target band of N160-N176 to the dollar set in November when it devalued the currency by 8 percent to save its foreign reserves.
On Monday and Tuesday, it sold dollars at N198 naira, dealers said.
“The market is weaker than the central bank rate … counterparties are selling dollars based on how they were able to buy it,” a dealer at a major lender said,
