Subsequent to last Tuesday’s assurances by the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, that the CBN would continue to intervene in the foreign exchange market, the bank wednesday auctioned the sum of $185.86 million through retail Secondary Market Intervention Sales (SMIS).
This is just as the CBN yesterday settled the 10th Over-the-Counter (OTC) foreign exchange (FX) Futures Contract valued at $965.29 million which matured on the FMDQ OTC Securities Exchange. The FMDQ revealed this on its website.
The bank’s acting Director in charge of Corporate Communications, Isaac Okorafor, while confirming the auction sale, disclosed that out of the auctioned amount, only $3.14million was sold as spots, while the sum of $182.72million was sold as forwards.
Okorafor further explained that the overall picture of the inter-bank forex market was that of optimism, going by the level of access now being enjoyed by different categories of customers in both the wholesale and retail segments of the market.
Emefiele had while assuring Nigerians of the imminent end of the current recession in 2017, at the end of his meeting with the leadership of the Senate, declared that the bank would continue its relentless intervention in the forex market.
Emefiele hinged the optimism of the CBN on the accretion to the country’s foreign reserve, which he said currently hovered above the $31billion mark.
According to him, “our reserves stand at above $31 billion and that provides us enough of firepower or ammunition to be able to defend the currency, and we will do so with all intensity to ensure that foreign exchange is procured by everybody.”
The naira-settled OTC FX Futures Contract was launched last year following the introduction of a flexible FX market.
The FMDQ had during the launch of this product on its Exchange, noted that while it would be of tremendous benefit to Nigerian corporates, it would equally of immense importance and advantage to, among others, the CBN, the Nigerian FX market and the nation’s economy as a whole.
The Managing Director/CEO of FMDQ, Mr. Bola Onadele, had described the naira-settled OTC FX Futures product as a major milestone development in the evolution of the Nigerian financial markets. The naira maintained its previous day’s value of N388 to the dollar on the parallel market wednesday.
Nevertheless, the value of naira exchange rate for portfolio investors — eased for a second day yesterday despite the central bank supplying $25 million to boost liquidity.
The naira was quoted at N378.54 to the dollar on the new foreign exchange trading window introduced by CBN for investors, data from the FMDQ showed.
It closed at N374.96 to the dollar the previous day.