CBN increases dollar supply to forex market by 40%

To sustain naira gain, the Central Bank of Nigeria (CBN) on Friday pumped in a total sum of $388.66 million into the forex market, about 40 per cent higher than what it sent to the foreign market last week.

There was a specific instruction to banks, and other retail segment of the interbank market, to pay required attention to requests of dollars by small and medium-sized enterprises (SMEs).

For close to two weeks, the CBN has been focusing on the wholesale and invisible segments of the market, which dealers said were still puting pressure dollar-demand on the economy.

The wholesale demand, which usually comes from the manufacturers, is yet to be properly addressed by regulatory authorities of the market.

However, the highest dollar that the bank pushed into the market in March 2017 at a go, was valued at over $346 million, which reportedly eased access to foreign exchange at the time under reference

Read also: Nigeria pushes for 50% of Shell’s $25bn global investments for 2017

But the CBN spokesman, Isaac Okoroafor, told newsmen that the apex bank was nearly embarrassed by Tuesday’s forex trading, which saw naira lose about 10 per cent value over dollars from the previous week’s transactions.

He said that the sum of $87.885 was for spot sales, while $300.8 million was sold as forwards requests in anticipation of demands by both the real sector and SMEs.

According to Okoroafor, the introduction of forwards window was based on thre planks of 30, 45 and 60 days respectively.

Okoroafor stated that the CBN sold $100.95 as 30-day forwards; $110.48 million as 45-day forwards and $99.37 as 60-day forwards.

“We will continue with the intervention to monitor operations of the Bureau de Change (BDC) segment of the market, along with other operators, to meet the needs of low-end users.

“The Bank remained resolute in ensuring that it supplies enough forex to genuine customers and in the process sustain the liquidity in the market such that never again will naira slip below normal adjustments, based on demands, ” he stated.

With this development, he expressed hope that the CBN will inch even more closer to its objective of convergence of the rates in the interbank and BDC segments.

The apex bank last week suspended some banks for alleged diversion of dollars meant for SMEs to other big time users, but later let three of the banks off the hook.

 

 

 

 

RipplesNigeria ….without borders, without fears

Click here to download the Ripples Nigeria App for latest updates

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now