Nigeria's naira is stabilizing against the U.S. dollar, the central bank governor said on Tuesday, after the government met recent strong demand for dollars from importers and foreign investors with Nigerian assets.
Chukwuma Soludo told lawmakers dollar demand in the interbank foreign exchange market has declined sharply to around $72 million on Tuesday from over a $1 billion last week.
"We have met the demand in the market," he said. "As of today, the rate has ... just appreciated because there is a decline in demand."
The central bank has allowed the naira, broadly stable against the dollar for months, to tumble to around 135.50 last Thursday from 117 in the last few weeks, causing the interbank forex market to effectively shutdown.
Soludo refused to specify a target for the naira/dollar exchange rate, saying the appropriate level depends on supply and demand fundamentals.
"The Central Bank of Nigeria is committed to a stable exchange rate, but not a fixed exchange rate. We want a rate that is market determined," he said.