Obinna Chima in Lagos and James Emejo in Abuja
The naira closed at N292.15 to a dollar on the interbank market monday, slightly stronger than the N292.25 to a dollar at which it closed on Friday, after volatility surged following the decision by the Central Bank of Nigeria (CBN) to remove the limit on bid-offer spreads on the FX market, fuelling expectations that the naira would extend its fall as it was traded more freely.
It was gathered that the nation’s currency fell to as low as N297 to a dollar during intra-day trading, before it recovered to N294.5 to a dollar and finally settled at its closing rate of N292.15 to a dollar.
THISDAY learnt that the naira was buoyed by the decision by authorised dealers to restore the 50 kobo offer spread on the currency in the FX market.
“What that means is that you can buy at any price, but when you are selling to your client, the spread should not be more than 50 kobo,” the source explained in a phone interview.
Shedding more light on what might have necessitated the decision, she attributed it to the anticipated funding of the one-month forward contracts of $697 million that matures this Friday, adding that “it could be to ensure that the naira does not fall below N300 to a dollar”.