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CBN Boosts Forex Market With $195m

The Central Bank of Nigeria (CBN) wednesday intervened in the forex market with injection of $195 million.

The forex inflow, which came on the first day of business after the Eid-el-Fitr celebration, went to various segments of the inter-bank market.

The intervention was part of CBN’s plans to shore up the value of the naira against the dollar and achieve its exchange rate stability goal. The naira continued its stability in the forex market, closing at N370/$1 in the parallel market, from N520/$1 in February.

The bank’s acting Director, Corporate Communications Department, Mr. Isaac Okorafor, confirmed the figures and disclosed that the bank was impressed by the high level of transparency exhibited by stakeholders in the market.

With the rate of inflation dropping from its April 2017 figure of 17.24 per cent to 16.25 per cent at the end of May, 2017, the CBN spokesman said the bank remained upbeat that the fortunes of the naira would improve further in the months to come.

Meanwhile, the naira continued its stability in the forex market, exchanging at an average ofN365/$ on the parallel segment of the market on yesterday and N363/$ on the BDC segment.

According to figures compiled by THISDAY, between February 21 and June 21, 2017, the CBN intervened in the market by selling the greenback to authorised dealers in 32 sessions.

The dollar sales have been targeted at retail invisibles for PTA, BTA, school fees and medicals, wholesale forwards, SMEs, and Secondary Market Intervention Sales (SMIS).

The forays by the central bank in the past four months has helped in eliminating the pressure in the forex market, ensured exchange rate stability and eliminated currency speculators.

Owing to this measure, the naira which fell to a historic low of N525/$ on the parallel market four months ago, has been trading around N360/$ since April.

A breakdown of the dollar sales showed that $680 million was pumped into the market in February; $1.542 billion was sold in March; $1.616 billion in April; $2.102 billion in May; and $1.196 billion in June.

Commenting recently on how far the CBN would go to sustain its market interventions, its governor, Mr. Godwin Emefiele, had said: “I have said it and I will repeat myself that the interventions will be more vigorous than before to underscore the fact that we are determined to ensure that the Nigerian economy recovers, by making sure that foreign exchange is made available to operators of the economy to conduct their businesses.”

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