The Central Bank of Nigeria (CBN) has introduced longer-term contracts on the Naira in a move to attract more foreign inflows, shore up its dollar reserves and prevent the currency from weakening, according to source.
The apex bank has kept the Naira stable even as oil prices drop and foreign investors book profits on local bonds. It operates a multiple exchange rate regime that it has used to manage pressure on the currency.
The CBN offered Naira-futures contracts for five-year settlement for the first time, priced at 379.81 Naira to the U.S. dollar, traders said. The longest tenor prior to this move was a 13-month contract, which the Central Bank has offered for more than a year.
The Central Bank Governor Godwin Emefiele last month said that no adjustment of the Naira was planned and that the bank would continue to sustain the value of the currency.
Amaka E. Nliam