The Central Bank of Nigeria (CBN) on Monday opened foreign exchange trading at the interbank market in a bid to ease the pressure on the naira.
This follows the apex bank’s decision to remove its peg on the currency, freeing it and allowing its value to be determined by market forces.
The currency last week exchanged at N199 to the dollar but after the first few trading on Monday, it weakened to N253 per dollar.
At about 11:02am, the naira had fallen to 264 to the dollar at the inter-bank market, with dealers expressing extreme caution in proceeding with transactions.
A few minutes later, it rose up to 260, which was the initial predicted position the CBN-FMDQ OTC guideline was planned to work with.
As at 2pm, the naira was trading at the interbank market at 260.50 to a dollar.
The central bank then launched a special auction to clear a backlog of hard currency orders. Less than $1 million changed hands, and trading was extended to 5 p.m.
By 5:01pm at the close of trading for the day, it had fallen to N280 per dollar.
On the Black market however, currency dealers were quoting the naira at between 325 and 345 naira to the dollar, up to 10 percent stronger than on Friday. This is due to expectations that more forex liquidity on the interbank market would reduce demand on the street.