The Central Bank of Nigeria (CBN) plans to auction N150 billion ($489.5m) of open market bills on Thursday, traders said, its second bill sale in a week as the country seeks to attract more foreign investors.
The bank last month shifted policy to try to force banks to lend to help revive the Nigerian economy stuck with low growth after a recent recession. But with falling oil prices and foreign investors taking profits, the naira is regaining focus.
The CBN planned to sell the bills with maturities from 84-day to 350-day, traders said, after it auctioned N34.4 billion in treasury bills on Wednesday at higher rates. Last week, the bank sold N100 billion in bills.
Pressure has been building on the naira as oil prices drop and foreign investors book profits on local bonds in response to yields which have fallen from as high as 18 per cent a year ago.
In a further sign of pressure on the currency, President Muhammadu Buhari told the apex bank on Tuesday to stop providing funding for food imports, his spokesman said.
The naira was quoted at N364 yesterday on thin liquidity, traders said. It eased to N364 per dollar on Friday, from a quote of 363.50 as falling oil prices tightened liquidity on the currency market.
A dollar shortage was initially caused by a slowdown of foreign inflows after local debt market yields declined.
Nigeria operates a multiple exchange rate regime that it has used to manage pressure on the currency. The official rate of N306.90 is supported by the CBN but a trade rate of N364 is widely quoted by foreign investors and exporters.