CBN to Further Flood Forex Market….As Rates Converge

In spite of the naira’s strong showing in the foreign exchange market last week, which saw the currency gain substantial ground against the United States dollar, selling at N363/$1 compared to the previous rate of N378/$1, sources at the Central Bank of Nigeria (CBN), at the weekend, disclosed plans by the apex bank to inject more funds into the market this week.
According to the sources, the CBN was not resting on its oars and remained determined to ensure a convergence between the interbank and Bureau de Change (BDC) rates soon, hence the move to continue its intervention in the interbank market.
It will be recalled that the CBN on Tuesday, May 30, 2017, intervened in the inter-bank market to the tune of $482.6 million with the Retail SMIS allocated the sum of $285,779,350, while the $100 million was offered in the Wholesale SMIS auction window. The Small and Medium 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.
Speaking with newsmen at the weekend, the CBN Acting Director, Corporate Communications, Isaac Okorafor, said there were indeed plans by the CBN to make necessary interventions in the forex market, in line with its earlier resolve to achieve forex rates convergence and liquidity in the market.
On how the Bank hoped to sustain its interventions, Okorafor said the CBN had enough forex to meet the requirements of all customers, who had genuine need for the dollar. He also expressed optimism that the current policy of the Bank and the cooperation of all stakeholders would check the unwholesome activities of speculators.
Meanwhile, indications at the weekend suggested that the rates between the interbank and BDC may soon converge, with the difference now down to a few naira.
Observers, while commending the bold move of the CBN, urged the Bank to remain committed to its goal for the benefit of the Nigerian economy.
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