The demand for the United States dollar at the Central Bank of Nigeria’s (CBN) regulated Wholesale Dutch Auction System (WDAS) stood at a total of $3.586 billion in October, findings by THISDAY has shown.

The total demand for the greenback in the month, represented a drop by 12 per cent or $495 million, compared with the $4.081 billion recorded in September.

The drop in dollar demand was attributed to series of measures that were introduced by the CBN to tackle the perennial demand for the greenback observed in the market last month.

Some of the policies that were  adopted to save the local currency from suffocating  under the  weight of dollar demand, included the introduction of further restrictive monetary policy measures which led to the hike in the Monetary Policy Rate (MPR) – benchmark interest rate – from 9.25 per cent to 12 per cent, the commencement of periodic intervention by the banking sector watchdog in the interbank market (to either buy or sell forex), to restrict multinational firms from buying forex at the WDAS, among others.

THISDAY findings further showed that the supply of the greenback at the bi-weekly auction in October also stood at a total of $2.850 billion. It also revealed that the regulator cut down the volume of dollar offered to the market by 12 per cent or $40 million, compared with a total supply of $3.250 billion recorded the preceding month.

But the naira gained remarkably against the dollar in the month under review, as the apex bank was only able to clear the amount demanded by currency users only on two trading sessions out of the eight sessions held in the month.

Specifically, the naira improved by N5.15 to a dollar at the WDAS from N155.40 to a dollar on the first trading session – October 5, compared with the N150.25 to a dollar on the last trading session –October 31.

CBN Governor, Malam Sanusi Lamido Sanusi, had assured that various measures adopted last month were expected to strengthen the local currency. He had explained that the measures were intended to reduce the quantity of naira in the system and free up dollar supply.

“My feeling is that the naira is going to strengthen as measures kick-in. We will see these speculating oil marketers disappearing and then it will be genuine importers coming to the window. We believe banks are long on dollars and holding cash. We will see if they are sitting on cash. We have not introduced capital controls. We are simply saying if you are bringing in capital into the market then you can also take from the market,” the regulator had said.

Source: ThisDay/Obinna Chima