TheCable

Following the Central Bank of Nigeria (CBN) decision to let market forces drive the position of the naira, the interbank market pushed the local currency to as high as 264 against the greenback.

According to Bloomberg, the interbank market rate opened around N253 to the dollar on Monday at the start of the new foreign exchange regime.

At about 11:02am on Monday, the naira had moved to 264 to the dollar at the inter-bank market, with dealers expressing extreme caution in proceeding with transactions.

A few minutes later, the naira was up to 260, which was the initial predicted position the CBN-FMDQ OTC guideline was planned to work with.

Earlier, the CBN said primary dealers of forex (banks) would be expected to make deals at N260 to the the dollar with a band from 260 to 270, while the CBN expresses optimism that the currency will settle at 250 to the dollar.

The interbank trading, which was billed to stop at 2pm, was extended to 4pm in order to ensure some stability in the market before the close of the day.

As at 2pm, the naira was trading at the interbank market at 260.50 to a dollar, while the daily average holds at 247.

Guaranty Trust Bank is currently trading at N260 to a dollar, a source familiar with the trading activities of the bank told TheCable, adding that the bank had purchased dollars from an international oil company at 260.

The CBN will also be holding an auction later in the day to solve pending liquidity problems and clear the forex backlog estimated at $4 billion.