The local currency surged by 0.7 per cent yesterday to 282.5 per dollar, after earlier shedding as much as 0.5 per cent following market adjustments to the new forex policy released by the apex bank.
The CBN sold dollars onto the interbank forex market for a third day to ease dollar shortages after it floated the currency. The regulator has intervened in the market by selling forex since it ended the currency’s 16-month fix of 197 to 199 per dollar on Monday.
It sold $4 billion in the spot and forwards markets that day to clear a backlog of demand for hard currency, and followed that with about $100 million of sales on the spot market on Tuesday.
Forward contracts dropped as traders reduced their bets on how much further the naira will weaken, although they still see it dropping 6.5 percent by late September.
Three-month naira non-deliverable forward contracts fell 4.7 per cent, the most on a closing basis since May 17, to N302.25 per dollar.
