Central Bank Sells $100m as Naira Pulls Back From Record Low

The flotation policy newly introduced by the apex bank has had an instant corrective effect on the value of the naira in exchange for the dollar.

Nigeria’s naira gained on its second day of trading without a peg after the central bank again intervened in the market by selling dollars, according to Bloomberg.

The Central Bank of Nigeria sold around $100 million in the interbank spot market on Tuesday, according to spokesman, Isaac Okorafor.

That followed an auction of $4 billion on Monday when the naira slumped 30 percent after the Central Bank abandoned its peg. Stocks gained, while yields on Nigeria’s Eurobonds fell to 10-month lows.

“It’s our estimate that the bulk of the backlog of orders has been met," Okorafor said by phone from Abuja, the capital.

“We’re very optimistic that liquidity in the FX market will improve. Whether we decide to intervene again depends on the dynamics.”

The currency of Africa’s biggest economy strengthened 0.4 percent to 281.5 per dollar by 6:33 p.m. in Lagos, the commercial capital, after declining as much as 1.4 percent earlier to a record 286.5.

A currency peg of 197-199 had been in place since March 2015.

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