CBN injects another $100 million into forex market

The Central Bank of Nigeria, CBN, on Thursday intervened in the inter-bank foreign exchange market for the fifth time in three weeks by offering $100 million for wholesale requests.

Out of the total offering, CBN spokesperson, Isaac Okorafor, said about $70 million was sold to meet requests for business/personal travel allowances, BTA/PTA.

Since the commencement of the intervention exercises, the CBN said more customers of banks and other business people have been able to overcome the earlier difficulties they were facing in obtaining foreign exchange for their transactions.

Mr. Okorafor said the CBN was committed to sustain the tempo of foreign exchange supply to the interbank FOREX market and ensure liquidity.

“The Bank remains resolute in ensuring that it supplies enough FOREX to genuine customers of deposit money banks and increase liquidity in the market,” Mr. Okorafor said.

He said the uniqueness of the wholesale forwards was that banks were allowed to use their winnings from auctions to fund matured obligations to meet letters of credit remittances, extinguish bills for collection and other FOREX demands.

“With this development, importers who had hitherto been using bills for collection will now experience relief instead of having to patronize other more expensive sources,” the CBN spokesperson said.

Since the CBN started the intervention in the interbank market over $1.2 billion has been injected for both wholesale and retail interventions in the past few weeks.

The first intervention following the review of the FOREX policy more than three weeks ago was about $500 million, while about $270 million was injected in the second tranche of supply to the market.

Apart from another $367.13 million that supplied to the market in the third attempt to meet the requests of customers. It consisted about $144,073,753.07 for 45 days requests, while $223,060,576.86 was for 60 days.

The last intervention was on Tuesday, March 7, when about $100million was injected in the market.

The Naira on Thursday marginally appreciated against the dollar at the parallel market, the News Agency of Nigeria (NAN) reported.

The Nigerian currency gained three points to exchange at N462 to a dollar, after it closed at N465 on Wednesday, while the Pound Sterling and the Euro closed at N550 and N477, respectively.

At the Bureau De Change (BDC) window, the Naira was sold at N399 to a dollar CBN controlled rate, while the Pound Sterling and the Euro closed at N550 and N500, respectively.

The Naira exchanged at N305.80 at the interbank market.