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CBN sells $313 million to offset dollars demand backlog

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The Central Bank of Nigeria (CBN) has sold about $313m in a two-month forward auction to clear a backlog of Dollar demand, the third of such since June

The Central Bank of Nigeria (CBN) has sold about 313 million Dollars, in a two-month forward auction to clear a backlog of Dollar demand.

This is the third of such auctions since the launch of the forwards market in June 2016.

Its comes about a week after the regulator held a two-month Dollar forward auction to clear a backlog of demand from airlines, manufacturers and other companies, due to huge shortage of the dollar.

Traders say the bank had sold less foreign exchange than it was expected at a special auction, and bids had been accepted at a range of 310-350 per Dollar.

In an earlier development, Elombah.com had reported that Nigeria expects to sell its Eurobond worth around $1 billion before the end of the year.

Presently, it is in the process of appointing managers for the sale, Finance Minister Kemi Adeosun [pictured above] said on Friday.

The Eurobond is part of Nigeria’s plans to borrow a total of 1.8 trillion naira ($5.8 billion) from abroad and at home to fund an expected budget deficit of 2.2 trillion naira this year.

“We are appointing parties this week, we are hoping to come before the end of the year,” Adeosun told Reuters at the sidelines of an investment conference at the London Stock Exchange. 

She gave no details.

“We have headroom and we are very fortunate in that regard, we have very low debt to GDP ratio,” she later told the conference.

Africa’s biggest economy has slipped into recession for the first time in 25 years, brought on by low oil prices that have cut government revenues and weakened the OPEC member’s currency. 

Crude oil sales make up 70 percent of national income.

The African Development Bank has said it will help Nigeria to overcome its recession. 

The lender’s board is expected to grant a $1 billion loan at a rate of around 1.2 percent, which Nigeria could use to help plug its deficit.

The finance minister said she hoped oil prices would stabilise around $42 and $50 per barrel. 

Oil edged higher on Friday, with Brent crude futures 12 cents higher at $51.50.

Adeosun also said the government had spent 770 billion naira on capital expenditures since President Muhammadu Buhari signed the 2016 budget in May.

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