CBN to sell dollar forwards to clear backlog of demand

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LAGOS, OCTOBER 14, 2016 – The federal government of Nigeria will sell two-month dollar forwards at an auction on Friday to clear a backlog of demand from airlines, manufacturers and other companies, traders said.Dollar shortages have caused many firms to shut down operations and lay off workers, compounding an economic crisis exacerbated by fall in global oil prices, Nigeria mainstay.

“The central bank has asked (banks) to submit bids for a special forex auction before 2 p.m. for funded forwards with 2-month tenor,” one traders told Reuters.

Nigeria’s foreign exchange reserves were down $24.21 billion by Oct. 10, their lowest in more than eleven years, limiting the number of dollars available on the official interbank spot market and causing the naira to sharply depreciate.

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