The Central Bank of Nigeria (CBN) plans to sell shorter-dated dollar forwards to inject liquidity into the official market and to support the naira, traders said on Monday.
The local currency has weakened on both the official and black markets. The naira fell to N328.50 on the official market on Monday but later gained some ground to close at N306.15 after the central bank intervened. However, it slid past N400 on the black market.
“In the weeks ahead, the central bank will sustain its intervention,” spokesman, Isaac Okorafor, said in a statement.
“The bank will sell short tenured forwards to meet demand of manufacturers and all other foreign exchange users,” he said, adding that the bank was striving to achieve exchange rate stability.
On Monday, traders said the bank will auction $100 million to be settled between one week and 30 days, as against 60-day contracts it had written previously.
The bank auctioned $418 million at N310 on Friday to airlines, agricultural firms, petroleum and raw material importers in addition to $350 million it sold last week to individuals with certain foreign expenses, it said.
Meanwhile, the Nigerian arm of Abu Dhabi telecom group, Etisalat, is yet to agree to a deal on restructuring a $1.2 billion loan with local banks after it missed a payment, a company source told Reuters.