CBN Injects $195m into Forex Market

Obinna Chima
The Central Bank of Nigeria (CBN) on Monday injected a total sum of $195 million into the interbank foreign (forex) market to meet the requests of customers in the various segments of the market.

This followed its intervention in the interbank forex market, last week, to the tune of over $800 million.
A breakdown of the intervention revealed that the bank offered the sum of $100 million to authorised dealers interbank wholesale window, while it allocated the sum of $50 million to the Small and Medium Enterprises (SMEs) window.

The invisibles segment was allocated the sum of $45 million to meet the needs of those who applied for Forex to settle Business/Personal Travel Allowances, school tuition, and medicals, etc.

Confirming the figures in the latest round of intervention by the Bank, its Acting Director in charge of Corporate Communications, Mr. Isaac Okorafor, in a statement, also announced a retail option submitted yesterday, adding that the results would be released subsequently.

The CBN spokesperson said the bank would continue to ensure adherence to its forex policy by insisting on transparency of all stakeholders to guarantee stability in the market.
Meanwhile, the naira continued to maintain its stability in the forex market, exchanging at an average of N364/$1 in the BDC and parallel market segments respectively.

The CBN disclosed last week that cumulative transactions on the new Investors and Exporters’ (I&E) window which was created in April has risen to $2.2 billion, from about $1 billion last month.
Also, CBN dollar sales on the I&E forex window has reduced to below 30 per cent, the Deputy Managing Director, Stanbic IBTC Bank Plc, Mr. Demola Shogunle, disclosed recently.

Shogunle had said the development on the I &E window was a reflection of the renewed confidence in the Nigerian economy. Shogunle said the Banker’s Committee acknowledged that the efforts and measures that had been put in place regarding trying to encourage foreign portfolio investors (FPI) were already yielding fruits.

The Stanbic IBTC boss explained: “Specifically, you would remember that about six weeks ago, a new window was opened, called the Investors and Exporters’ FX window. Between when it was opened and now, turnover in that market is in excess of $2.2 billion, which is very impressive. The CBN’s share of that market is less that 30 per cent.

“What does that mean? It means that FPI and exporters are the ones playing in that market and because of that, when that window initially opened, the bid and offer spread was as wide as N40-N60. As we speak now, the bid and offer spread has reduced significantly.”