The naira strengthened against the dollar at both official and foreign exchange markets following the Central Bank of Nigeria’s (CBN) sale of $876 million through the Retail Dutch Auction System (RDAS).
On Thursday, the naira gained 0.18%, with the dollar quoted at N1,593.62 compared to N1,596.52 the previous day at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to FMDQ Securities Exchange Limited data.
Dollar supply increased significantly by 51.18% to $141.99 million on Thursday from $93.92 million on Wednesday. The intraday high for the dollar was N1,616, down from N1,628 the previous day, while the intraday low remained unchanged at N1,520.
In the parallel market, the naira appreciated further, with the dollar falling to N1,595, a 0.94% gain from N1,610 earlier in the day, and a 1.57% gain from N1,620 on Wednesday.
The CBN’s $876 million auction, which concluded on August 7, 2024, is part of its strategy to enhance market liquidity and transparency.
The introduction of RDAS aims to provide direct FX access to end-users, reduce information asymmetry, and support price discovery.
This measure complements the recent two-way quote system, which has seen over $305 million in forex sales to dealers in the past three weeks.