CBN struggles to improve dollar liquidity, sells $195 million on FOREX market

Features & Reports
Nigeria's central bank sold $195
million on the foreign exchange market on Monday as part of its
effort to improve dollar liquidity and reduce pressure on the
local currency, the naira, a bank spokesman said in a statement.
    Nigeria is battling a currency crisis brought on by low oil
prices, which has tipped its economy into recession and created
chronic dollar shortages. It wants to attract foreign investors
and at the same time maintain a strong currency to ward off
    The central bank has been intervening on the official market
in recent months to try to narrow the spread between rates on
the official market and black market. It has sold over $5
billion since February.
    In an emailed statement, the central bank said $100 million
was released to authorized currency dealers and $50 million to
small and medium-size enterprises. A further $45 million was
provided for such items as medical fees, tuition fees and
business travel.
    The regulator, in notices to commercial lenders on Monday,
said an auction would be held for spot and forward deals which
would be settled within the next 60 days.
    Last week, the bank said it would continue to intervene in
the foreign exchange market to support the naira [nL8N1JC48K].
    Nigeria has at least six different exchange rates including
a retail rate set by licensed exchange bureaus, the official and
black market rates and a window for investors where the naira
can be traded at rates set freely between buyers and sellers.
    The naira was quoted at 371.41 on the investors' window
>NAFEXD=FMDQ> on Monday.
    The local currency traded at 368 on the black market
>NGNFX=BDCN> and traded at around 305.80 to the dollar on the
official window <NGN=D1>.

 (Additional reporting by Camillus Eboh in Abuja and Alexis
Akwagyiram in Lagos, editing by Larry King)

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