The Central Bank of Nigeria (CBN) sold $660 million in three and five-month currency forwards at an auction aimed at clearing a backlog of dollar demand yesterday.
The auction came after the apex bank asked commercial lenders to bid in a special currency auction targeted at clearing backlog of dollar obligations of manufacturing, airlines, agriculture and petroleum sectors.
Traders said the result of the auction was announced late Tuesday while payment for the dollar sales was due on Wednesday.
This is the first major dollar sales to the key sector by the CBN this year in a bid to spur growth and revive Africa’s biggest economy, which slipped into recession last year due to currency crisis necessitated by drop in global oil prices.
Nigeria is in its first recession in 25 years, caused largely by the oil price drop, which has cut the supply of dollars needed to fund imports.
The dollar shortage in the Nigeria crude sales make up two thirds of government revenue, has caused many companies to halt operations and lay off workers, compounding its economic crisis.
The local currency is quoted at N498 to the dollar on the black market, same level since last week, while commercial lenders are quoting N314 to the dollar at the interbank market on Wednesday.