CBN adjusts naira-dollar peg

The Central Bank of Nigeria (CBN) on Thursday adjusted the exchange rate peg it set for the naira against the dollar from N196.95 to N196.90.

In its regulatory function, CBN had pegged the exchange rate last week in order to stabilize the naira against the dollar due to dwindling revenue.

Analysts believe the apex bank may be trying to gauge the level at which it can defend the naira, but noted that the bank was running low on ammunition to do this.

Dealers confirmed that the CBN had sold dollars to the interbank market at the new rate on Wednesday, dismissing the move as a currency appreciation of the naira because the change wasn’t market driven.

The naira opened trade on thin volumes at N198.90 to the dollar on the interbank market, but traded at N220 on the black market on Thursday.

Nigeria’s foreign reserves fell to $29.18 billion by June 9, 2015, lower by 1.65 percent in May, as the CBN burned cash to defend the naira.