The Central Bank of Nigeria (CBN) was able to maintain its hold on the naira exchange rate in the month of May as the currency did not exceed the N162.45 to a dollar band.

Money market analysts said the relative stability in the naira value in the period should be linked with the sustenance of the positive tempo at the foreign exchange market where CBN’s intervention in the Retail Dutch Auction amounted to $.34 billion in the month of May.

The CBN’s intervention to calm the market, according to some foreign exchange marketers, signalled that the apex bank would protect the exchange rate.

The incoming Governor of the Central Bank, Mr. Godwin Emefiele, who is billed to resume his tenure on Tuesday had promised not to devalue the naira, a development which analysts said may have informed the decision of the interim management of the bank to defend the local currency.

A breakdown of the auctions showed that for the auction held on May 5, the apex bank sold $345,884,819.89.

For the auction of May 7, $289,966,907.84 was sold. The figure was raised in the following week when $355,444,203.92 was purchased by the various banks. Total amount sold at the auction of May 14 was put at $258,020,760.16.

The apex bank was unrelenting at the auction of May 19 as it sold $345,970,424.20 at the RDAS, whereas the value of the dollars sold at the auction of May 21 was $384,764,861.71.

The incoming CBN Governor, who is against naira devaluation, had warned that a devaluation of the naira would be “devastating” for the economy.

The Central Bank of Nigeria’s exchange rate policy is correct and the regulator needs to ensure Nigeria has a strong currency, Emefiele said in his first public comments since being nominated by President Goodluck Jonathan to the position.

He stated that the decline in foreign-exchange reserves was due to a “speculative attack” promising to take measures to support the naira.
He also added saying “I am aware that the core mandate of the Central Bank of Nigeria is to achieve the monetary and price stability. Another core mandate of the CBN is to ensure that we have a strong naira and build strong foreign reserve. We are also expected to ensure that we have a strong financial system in Nigeria.”