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Naira Firms As CBN Intervenes With $100m In FOREX Market

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Wsj
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Naira Firms As CBN Intervenes With $100m In FOREX Market

Unread postby Wsj » Thu Apr 20, 2017 5:09 pm

Nigeria’s naira firmed 1.27 percent to 395 per dollar on the black market on Thursday, traders said.

The central bank has been intervening on the official market to try to narrow the currency’s spread with the black market rate, which was 520 to the dollar in February after it devalued the naira for retail customers to 375.

On the official market, the currency was quoted at 306 on Thursday. February’s partial devaluation effectively created multiple exchange rates in Africa’s biggest economy.

The central bank has been intervening on the official market to try to narrow the currency’s spread with the black market rate, which was 520 to the dollar in February after it devalued the naira for retail customers to 375.

Following its injection of $280 million into the Foreign Exchange Market on Tuesday, April 18, 2017, the Central Bank of Nigeria (CBN) again on Wednesday, April 19, 2017, carried out spot, wholesale interventions in the interbank FOREX market by offering a total sum of $100m to authorized dealers to meet the 7 to 15-day forwards requests of customers.

The latest intervention was confirmed by the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, who, however disclosed that the banks and authorized dealers were only able to pick up $68.51 million.

Okorafor attributed the inability of the authorized dealers to fully subscribe to the CBN to a surfeit of forex in the system, which may lead to further appreciation of the naira.

He also disclosed that the CBN will on Thursday, April 20, 2017 continue its sale of $20,000 to Bureax de Change (BDCs) for onward sale to small-end users.

According to him, the trend monitored by the Bank indicated that deposit money banks are now able to meet the forex demands of their customers within the time frame stipulated by the CBN.

Speaking further, Okorafor said feedback on the Bank’s forex new window for Small and Medium Enterprises (SMEs) in the country revealed that majority of the small importers were heading for a major boost in their activities. This he said was responsible for the current appreciation of the Naira, stressing that the Naira will continue to gain strength with the relentless efforts of the CBN to to supply the market with forex.

The spokesman also reiterated the determination of the CBN to continue to intervene in the various sectors of the interbank forex market in order to guarantee access to all categories of customers requiring forex for legitimate obligations and ultimately ensure stability in the forex market.


Credit:TheStreetJournal
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