Again, CBN Sells Fresh $250m through FX Forwards

Obinna Chima

The Central Bank of Nigeria (CBN) on Wednesday offered $250 million through seven to 30-day foreign exchange (FX) forwards for agriculture, airline, petroleum products and raw materials.

The bank also called for bids for wholesale spot auctions of $100 million for business and personal travel allowances, medicals and tuition fees.

Confirming this, CBN spokesman, Mr. Isaac Okorafor, disclosed that the bank had also commenced heavy injections into the spot market in addition to the settlement of requests for wholesale spot bids for invisibles like school fees, medicals and personal travel allowance.

However, the naira maintained its previous day’s value of N410 to a dollar on Wednesday while the country’s external reserves increased by $28 million to $30.394 billion as of Tuesday, compared with $30.366 billion on April 7.

The central bank has intervened in the FX market to the tune of over $3 billion for both retail invisibles and wholesale forwards since February this year.

SMEs on Tuesday got some relief when the CBN offered $100 million to small and medium businesses through spot sales from its new FX window for them.

Also on Tuesday, the CBN released its results of seven to 30 days forward auctions of $100 million, just as it disclosed that authorised dealers subscribed fully to its offer on Monday.

Also, some authoritative sources at the CBN disclosed that as part of efforts to boost FX supply, the CBN would soon not only begin FX auctions on the spot market, but also open a special window for investors to trade freely for certain eligible transactions, particularly dividends and investment remittances.

A CBN source was also optimistic that with the current level of foreign reserves, the CBN has the capacity to sustain supply even if it has to keep doing so for the next three months.

Early this week, the central bank had disbursed $20,000 each to the Bureau de Change (BDC) operators in two tranches of $10,000 each, which according to Okorafor underscored the commitment of the bank to ensure liquidity in the foreign exchange market.