Shell Injects $12m, Naira Gains 2kobo
The supply side of the nation's foreign exchange market received a boost yesterday following the injection of $12 million by Shell Development Company (SPDC).
This development which led to about 18.5 per cent decrease 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 206th edition of the Dutch Auction System (DAS). N132.83 therefore exchanged for one US dollar at the close of business yesterday.
Shell, THISDAY checks revealed, had invited a select number of banks on Monday to bid for its foreign exchange yesterday. Those whose bids were successful would be given value (the foreign exchange) today. 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.
Out of the $90 million offered by the CBN on Monday, total amount of foreign exchange demanded by 54 banks on behalf of their customers stood at $86,920,752.54 out of which bids amounting to $81,411,735.70 were successful. Disqualified bids stood at $5,509,016.84.
The $81,411,735.70 sold to banks yesterday by the apex bank is $18.48 million or 18.5 per cent less than the $99,898,833.09 sold in the previous trading session, while the $86,920,752.54 demanded is $29.04 million or 25 per cent less than the $115,967,435.07 demanded in the previous trading day.
Cumulatively,the $81,411,735.70 sold to banks by the banking watchdog yesterday, brings to $25.353 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 $90 million offered to banks on Monday brings the total amount of foreign exchange that has been offered by the CBN since the debut of DAS to $19.14 billion.
Further analysis of yesterday's transactions, indicate that the highest bid rate fell from N134.00 to N133.50 per dollar, but the lowest bid rate inched up slightly from N131.80 to N132.83 per dollar.
At the export proceeds market, the average naira exchange rate was N133.40 per dollar at the close of business yesterday.
At the parallel market, the average naira exchange rate remained at N139 per dollar at the close of business yesterday.
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