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$657m CBN Intervention Boosts Naira

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By Bukola Idowu, Lagos,

An injection of $657.33 million into the foreign exchange market last week saw the value of the naira gain strength at three of the foreign exchange markets rising by 0.8 per cent at both the parallel and Bureau de Change ends of the market.

The naira also gained value at the Investors and Exporters foreign exchange market where it rose to N367.60 to the dollar from N360.6 which it sold earlier in the week as daily turnover in the market hovered between $75 and $50 million.

Central Bank of Nigeria (CBN) last week had injected $657.33 million into the foreign exchange market as interventions for the wholesale, retail, small and medium businesses and school fees as well as travel allowances. This is asides the $20,000 which it sells to each BDC twice a week.

At the BDC end of the forex market, the value of the naira had appreciated from N363 to the dollar on Monday to N360 by the close of business on Friday. Also at the parallel market,  the naira gained strength against the dollar selling at N360 at the weekend from N360 which it sold at the beginning of last week.

The apex bank had sold $195 million on Monday and another $462.33 million on Friday.  A breakdown of the interventions showed that $200 million was sold as whole sale interventions having sold $100 million each on Monday and Friday.

The apex bank also sold $90 million to those requiring foreign exchange for Business/Personal Travel Allowances, tuition and medical fees, among others, while SME forex window got $100 million. The Retail Secondary Market Intervention Sales (SMIS) received the largest allocation of $267.336 million which was sold on Friday.

The apex bank said it’s interventions in the forex market was in line with its commitment to sustain and deepen flexibility in the foreign exchange market to further enhance foreign exchange flow in the economy.

Acting director of the corporate communications department, Mr Isaac Okorafor, said the leadership of the CBN was impressed by the positive impact its current foreign exchange management was having on the manufacturing sector, agriculture and economic activities in general across the country.

While reiterating that the CBN management was also encouraged by growth in the non-oil sector, particularly agriculture, he noted that the apex bank would not relent in its efforts at sustaining stability in the inter-bank Forex market as well as ensuring the convergence between the exchange rates at the Nigeria Autonomous Foreign Exchange (NAFEX) and the Bureau de Change segments of the market.

According to him, the CBN would continue to ensure proper surveillance of the forex market to guard against any sharp practices by participants and uphold transparency of the process.



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