Posted by By Ayodele Aminu on
The supply side of the nation's foreign exchange market received a boost yesterday with the injection of $24 million by Chevron Nigeria Limited and $600 million by Netco.
The supply side of the nation's foreign exchange market received a boost yesterday with the injection of $24 million by Chevron Nigeria Limited and $600 million by Netco.
This development which led to about 21 per cent drop in demand for forex may have been responsible for the 2 kobo appreciation recorded by the naira against the United States' dollar yesterday at the 45th edition of the 2005 Dutch Auction System (DAS). Given this scenario, N132.88 therefore exchanged for one US dollar at the close of business yesterday. This is against the N132.90 per dollar that had ruled the market since last Tuesday.
Both Chevron and Netco, THISDAY checks revealed, had invited a select number of banks to bid for its foreign exchange earlier this week. Those whose bids were successful were said to have been given value (the foreign exchange) yesterday.
Under the nation's foreign exchange regime, oil firms are allowed to sell their foreign exchange to either the Central Bank of Nigeria (CBN) or banks in exchange of naira to enable them meet their local expenses. This, it was believed, would allow other channels of inflows into the foreign exchange market, besides those from the apex bank.
Ability of the CBN to preserve as well has build up the nation's foreign exchange has been responsible for the appreciation and stability of the naira within the last one year when the incumbent Governor of the CBN, Professor Charles Soludo came in. Nigeria's foreign reserves at May 2005 stood at $23 billion.
Meanwhile, forex valued at $115.45 million was sold to 58 banks yesterday by the apex bank, indicating 1.8 per cent increase over the $117.58 million sold at the last trading session, while the $138.4 million demanded yesterday is $37.7 million or 21.4 per cent more than the $176.1 million of the previous trading day.
According to the summary of yesterday's results, the highest bid rate was N133.5, while the lowest bid rate was N132.80 per dollar.
Unsuccessful bids stood at $239,570, while disqualified bids accounted for $22.7 million.
Cumulatively, the $115.45 million sold to banks by the banking watchdog yesterday, brings to $5.693 billion the total amount of foreign exchange that has been sold to banks by the CBN since the beginning of this year.
Similarly, the $120 million offered to banks Wednesday brings the total amount of foreign exchange that has been offered to banks by the CBN this year to $4.55 billion.
At the export proceeds market, the average naira exchange rate at the close of work yesterday stood at N134.95 per one US dollar.
At the parallel market, the average naira exchange rate was N142 per dollar at the close of business yesterday.