CBN Pumps Fresh $195m into Forex Market

Obinna Chima

The Central Bank of Nigeria (CBN) wednesday intervened in various segments of the inter-bank market to the tune of $195 million.

A breakdown of the intervention revealed that authorised dealers in the wholesale window segment received a $100 million offer from the bank, while the Small and Medium Enterprises (SMEs) and invisibles windows were allocated the sums of $50 million and $45 million respectively.

The bank’s acting Director, Corporate Communications Department, Mr. Isaac Okorafor, confirmed the figures and disclosed that the bank was impressed by the high level of transparency exhibited by stakeholders in the market.

With the rate of inflation dropping from its April 2017 figure of 17.24 per cent to 16.25 per cent at the end of May, 2017, the CBN spokesman said the bank remained upbeat that the fortunes of the naira would improve further in the months to come.

Meanwhile, the naira continued its stability in the forex market, exchanging at an average ofN365/$ on the parallel segment of the market on yesterday and N363/$ on the BDC segment.

THISDAY reported last Monday that since the CBN commenced its aggressive interventions in the interbank and bureau de change segment of the foreign exchange market, the bank, as of Friday last week, had pumped a total of $7.136 billion into the market.

According to figures compiled by THISDAY, between February 21 and June 21, 2017, the CBN intervened in the market by selling the greenback to authorised dealers in 32 sessions.

The dollar sales have been targeted at retail invisibles for PTA, BTA, school fees and medicals, wholesale forwards, SMEs, and Secondary Market Intervention Sales (SMIS).

The forays by the central bank in the past four months has helped in eliminating the pressure in the forex market, ensured exchange rate stability and eliminated currency speculators.

Owing to this measure, the naira which fell to a historic low of N525/$ on the parallel market four months ago, has been trading around N360/$ since April.

A breakdown of the dollar sales showed that $680 million was pumped into the market in February; $1.542 billion was sold in March; $1.616 billion in April; $2.102 billion in May; and $1.196 billion in June.

Commenting recently on how far the CBN would go to sustain its market interventions, its governor, Mr. Godwin Emefiele, 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 made available to operators of the economy to conduct their businesses.”