May 6, 2021
  • May 6, 2021

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Nigeria's naira weakens as CBN sells $20 mln to offshore investors

 Nigeria's naira traded at a record intra-day low of N436.81 against the dollar on Wednesday, after the Central Bank of Nigeria (CBN) sold $20 million this week to foreign portfolio investors seeking to repatriate profits abroad.

The $20 million sales this week by the CBN was the first dollar sale to foreign investors, traders said.

The CBN sold dollars on the 150-day forward markets at N435.81, traders said, near the low on the over-the-counter spot market. It offered the dollar at N410 for spot.

The non-deliverable forwards market quoted the naira at 434 to the U.S. dollar in six months' time.

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Dollar demand has been swelling and piling pressure on the naira. Importers with due obligations have scrambled for hard currency while providers of foreign exchange, such as offshore investors, have exited.

Foreign investors sold Nigerian assets last year as coronavirus lockdowns stalled economic activity and triggered a crash in the price of oil, the country's main export.

The bank last sold dollars to foreign investors in December up to when it had sold $50 million three times a week, traders said.

The central bank has in the past urged investors to be patient, saying funds can exit in an orderly fashion.

The naira has been quoted at N482 to the dollar on the black market, compared with the official rate of N381 set in July and backed by the central bank.