The Central Bank of Nigeria, CBN, on Thursday, June 30, sold $7 million at N283 to the dollar on the interbank currency market, a trader at a major commercial bank revealed.
According to traders, the local units of ExxonMobil, Chevron, Eni and Addax sold a combined $37.2 million through commercial banks to petrol importers while the interbank market traded a total of $60 million volume, with the naira quoted at 283 to the dollar.
Although naira has floated with the 200 exchange cap since the Central Bank of Nigeria,CBN, collapsed the exchange window, analysts have projected the currency will face tougher times in the coming months exchanging at 390 to a dollar.
RenCap’s Sub-Saharan Africa (SSA) Economist Yvonne Mhango, said sentiment risks being dampened by concerns around Brexit and the implications for the naira, as capital inflows may not materialise as rapidly as the CBN may have expected.
“We have used a N285/$ exchange rate in updating our models, but the risk is to the downside, and we see N390/$ by end of this year,” she said in a report titled: ‘Nigerian banks: Life after ‘40’, released yesterday.
According to RenCap, the more than 40 per cent naira depreciation and the liberalisation of forex markets; and the rise in interest rates could improve sector earnings in the near term, global risk sentiment will be key to price performance and capital inflows.
