Oil Majors Inject $25.5m as Naira Stabilises
Dutch Auction
By Ayodele Aminu
Three oil majors - Shell Petroleum Development Company (SPDC), Mobil Producing Nigeria Unlimited and Chevron Nigeria Limited have boosted the supply side of the foreign exchange market with $25.5 million.
This favourable development may have helped stabilise the naira yesterday. The naira has remained stable at N132.75 to one United States dollar for five consecutive week.
While Chevron sold $4.5 million yesterday to a select number of banks, Mobil and Shell are expected to sell $10 million and $11 million today.
Under the DAS introduced by the Central Bank of Nigeria (CBN) in July 22, 2002 as a means of conserving as well as preventing a drastic depreciation of the nation's foreign exchange rate, oil companies, which usually sell their forex to the apex bank, are allowed to sell to banks. This, it was believed, would deepen the forex market.
The reverse however has been the case, as most of the oil firms became racketeers, selling forex to a select few banks above the prevailing rates at the DAS (official market).
A peep into the summary of yesterday's trading results at the DAS shows that the lowest bid rate was N132.50 per dollar, while the highest was N133.50.
Out of the $100 million offered to banks by the CBN Monday, total amount of forex demanded by 63 banks on behalf of their customers stood at $110,337,401.48 out of which bids amounting to $101,640,998.40 were successful. Unsuccessful bids amounted to $52,617.80, disqualified bids were $4,312,810.28 while bids from unfunded accounts stood at $4,370,975.00.
The $101,640,998.40 sold to banks yesterday by the apex bank is $6.17 million or 6.4 per cent more than the $95,466,691 sold in the previous trading session, while the $110,337,401.48 demanded is $11.9 million or 12.1 per cent more than the $98,450,388.04 demanded in the previous trading day.
Cumulatively, the $101,640,998.40 million sold to banks by the banking watchdog yesterday, brings to $22.8 billion the total amount of foreign exchange that has been sold to banks by the CBN since the debut of the DAS July 22, 2002.
Similarly, the $100 million offered to banks Monday brings the total amount of foreign exchange that has been offered by the CBN since the debut of DAS to $17.487 billion.
At the export proceeds market the naira exchange rate against the dollar was N133.30 per one US dollar, indicating a slide of 20 kobo against the N133.50 the ruled the market at the previous trading day (Tuesday). While at the parallel market, the naira exchange rate stood at N139.00 per one US dollar.
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