The Central Bank of Nigeria has decreed that dollars bought from the interbank market can be held only for up to 48 hours, the latest in the series of tough measures that the apex bank is using to stop the speculations that it blames for the Naira’s drastic fall since last month.
After the 48-hour interval has elapsed, the dollars must be sold back to the central bank at its own day rate, according to a circular seen by Reuters. “There is no major trading going on now at the interbank, as a result of the new rules. Most people are merely giving an indicative rate,” the news agency quotes a dealer as saying. The naira was trading up 1.5 percent at 184.50 to the dollar in limited trade.
Yesterday, the Central Bank barred banks from holding their own funds in dollars in a bid to to end the speculative pressure on the naira that has seen it fall over 12 percent against the dollar this year.
“We do not want speculators in this market any longer,” the Central Bank governor, Godwin Emefiele, told Reuters in a phone interview after the decision was taken. He added that he believed the current Naira band, set last month at N160-N170, was “appropriately priced at this time,” meaning that the CBN will continue to defend the currency even as it is currently trading below the band.
The currency of Africa’s biggest economy has been battered by the drastic fall in global oil prices, it was devalued by 8 percent in a bid to halt the slide of its foreign exchange reserves.