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Naira Weakens As $1.57bn Flows Into Forex Market



The value of the naira last week weakened slightly against the dollar as N1.573 billion flowed into the foreign exchange market from both the Central Bank of Nigeria (CBN) and the Investors’ and Exporters’ window (I&E).

The CBN had injected $559.34 million during the four-day trading of the week as the inflow from the Nigeria Autonomous Foreign Exchange market (NAFEX) slightly reduced to $1.014 billion.

Inflow at the I&E window had slowed in the previous week to $1.031 billion as against the $1.2 billion which it saw in the preceding week. The naira which traded at N360.08 to the dollar at the start of the week declined to N360.75 by the close of trading on Friday.

The Central Bank of Nigeria (CBN), in its last intervention for the week, has injected the total sum of $349.34 million in the Retail Secondary Market Intervention Sales (SMIS) segment of the Forex market.  The CBN official spot rate opened the week at N305.70 to the dollar, a five kobo depreciation from the previous week, and stayed flat all through the week.

On Wednesday, it had injected $210 million offering the sum of $100 million to authorized dealers in the wholesale segment of the market. The Small and Medium Scale Enterprises (SMEs) segment received the sum of $55 million while the sum of $55 million was apportioned to invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA).

Figures obtained from the CBN last week Friday, indicated that the interventions were meant to meet obligations in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

Acting director, corporate communications department, CBN, Isaac Okorafor, who confirmed the releases, reiterated that the apex bank continued to intervene in the foreign exchange market owing mainly to its commitment to guarantee liquidity in the foreign exchange market and boost the production sector.

According to Okorafor, the continued interventions by the CBN in the forex market in addition to the recent currency swap with the People’s Bank of China (PBoC) would ease pressure on the country’s reserves.

He expressed confidence that the RMB15 billion deal would provide adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, stressing that the deal would protect Nigerian business men and women from the harsh effects of third currency fluctuations.

Speaking further, he explained that the bank, in injecting funds into the market, was playing its role of safeguarding the international value of the legal tender currency through exchange rate stability. He said the Bank was also committed to diversifying the Nigerian economy from oil.





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