Oyetunji Abioye with agency report
The Central Bank of Nigeria has sold
about $1bn on the forward market to clear a backlog of dollar
obligations in selected sectors, according to foreign exchange traders.
The traders said on Thursday that the
dollar sale was made last week. They described it as the largest special
auction by the CBN since the naira peg was removed in June.
Outstanding dollar demand was about $4bn
before June, when the 16-month-old peg was removed. Efforts to cut
dollar demand have been largely unsuccessful due to low oil prices.
Crude sales account for about 90 per cent of Nigeria’s foreign exchange earnings.
Traders said the CBN told banks to
prioritise airlines, manufacturing firms, petroleum products importers
and agriculture sectors, the sectors worst hit by the dollar shortage,
in the auction.
“The central bank sold $1bn at last
week’s special forex auction and directed banks to issue fresh letters
of credit to reflect the amount sold in favour of the affected sectors,”
a senior currency trader told Reuters.
Traders said the CBN sold 30-day and 60-day forwards at the auction.
On December 19, the CBN instructed
commercial lenders to submit their backlog of dollar demand from fuel
importers, airlines, raw materials and machinery for manufacturing firms
and agricultural chemicals for the special forex intervention.
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