CBN Pumps $482.6m into Forex Market

Obinna Chima

The Central Bank of Nigeria (CBN) on Tuesday sustained its intervention in the inter-bank segment of the foreign exchange (forex) market by injecting a total of $482.6 million into the market.

This, the bank said underlined its determination to protect the value of the naira.
A breakdown of the intervention indicated that the retail Secondary Market Intervention Sales (SMIS) was allocated the sum of $285,779,350, while $100 million was offered in the Wholesale SMIS auction window.

In addition, the Small, Medium and Enterprises (SMEs) window got an allocation of $52 million, while the invisibles segment, comprising Basic Travel Allowance (BTA), Personal Travel Allowance, medicals and tuition fees, among others, was allocated the sum of $45 million.

According to the Acting Director, Corporate Communications at the CBN, Isaac Okorafor, the interventions were in line with the bank’s resolve, echoed by its Governor, Godwin Emefiele, at last week’s briefing of the Monetary Policy Committee (MPC) meeting.

While expressing pleasure that the intervention of the Bank had ensured stability across all segments of the forex market, Okorafor expressed optimism that the central bank’s objective of exchange rate convergence would be achieved soon.
Okorafor therefore reiterated his call to all stakeholders to play their respective roles in ensuring a smooth running of the foreign exchange market for the overall benefit of the economy.

Meanwhile, surveys in Abuja, Lagos, Kano and Port-Harcourt yesterday indicated that the naira traded between the range of N375-381 to the dollar.
Emefiele had last week recalled that about three months ago, the local currency was trading at above N500 to the dollar on the parallel market, but has appreciated to between N370 and N375/$.

Describing this as a significant achievement vis-à-vis the convergence, Emefiele noted that the monetary authorities would however prefer a convergence that would head southwards rather than northwards.
“We would prefer a convergence that will significantly head southwards, than a convergence that will go northwards. The fact that we have seen a convergence in the southward direction gives us a lot of hope that things are working in the right direction,” he said.

On how far the CBN would go in sustaining its market interventions, he 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 being made available to operators of the economy to conduct their businesses.”