Naira: Dollar supply surge by 180 per cent at forex market over CBN intervention

US dollar supply at the official foreign exchange market jumped last Friday, reaching 180.59 percent to $440.13 million as commercial banks scrambled to evade regulatory sanctions from the Central Bank of Nigeria.

This occurs as, following a volatile week, the Naira slightly strengthened to conclude Friday at N1,435.53 per dollar.

At the end of business on Friday, information from FMDQ Security Exchange was made public on its official website.

Similarly, the Naira saw gains on the parallel market last week, closing at N1,440 against the US dollar on Friday after trading at N1,470 on Thursday.

ZINGTIE notes that the CBN expressed concern over the growing tendency of banks to maintain significant foreign currency positions last week in a circular titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks.”

As a result, the central bank issued an order requiring banks’ Net Open Position (NOP) to remain below 20% or above 0% of the funds held by the bank’s shareholders going forward.

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