CBN Sustains Forex Supply with $389 Million

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The retail segment of the interbank forex market received a huge boost yesterday as the Central Bank of Nigeria (CBN) intervened with a total of $388.66 million sold to authorised dealers in that sector of the market.

It also emerged yesterday that about 5.77.06 billion litres of petroleum products valued at N760.44 billion were imported into the country in the first quarter of 2017.

According to yesterday’s figures were the results of the bids submitted by dealers since Tuesday, May 2, 2017.

Confirming the numbers, the Acting Director, Corporate Communications Department at the CBN, Isaac Okorafor, disclosed that $87.885 was for spot sales, while $300.8 million was sold as forwards.

Okorafor further explained that the forwards were sold into three tenors of 30, 45 and 60 days respectively. According to him, the Bank sold $100.95 as 30-day forwards; $110.48 million as 45-day forwards and $99.37 as 60-day forwards.

While also confirming that the Bank continued with its intervention in the Bureau de Change (BDC) segment of the market to meet the needs of low-end users, the spokesman said the Bank remained resolute in ensuring that it supplies enough forex to genuine customers and in the process sustain liquidity in the market.

With this development, he expressed hope that the CBN would inch even much closer to its objective of convergence of the rates in the interbank and BDC segments.

It will be recalled that the CBN in the course of the week intervened in the wholesale and invisibles segments of the market with amounts valued at over $346 million to ease access to foreign exchange by different categories of customers.

However, the naira closed at N391 to the dollar yesterday.

“Things appear to be playing out in the CBN’s favour as far as exchange rates are concerned. The spread between parallel and official rates have now narrowed since February and this meets at least one of the CBN’s objectives.

“The CBN has effectively sent a clear signal that there will be no further official rate devaluation, neither will there be a currency float. And with FX reserves still on the rise, we believe the CBN may remain true to its word,” they added in a note yesterday.

CBN Governor, Godwin Emefiele had on Thursday met with President Muhammadu Buhari, following which he disclosed that the president was pleased with the gains recorded in the forex market, following the sustained intervention by the apex bank.

Emefiele said prices of crude oil in the international market which had been hovering between $55 and $56 per barrel had also helped in improving revenue generation and consequently fortified the nation’s currency.

“Basically, as it’s expected, what we normally do is from time to time, to brief the President about activities about the Central Bank of Nigeria particularly this time as it relates to the efforts that the Central Bank is making to stabilise the forex market and we briefed him regarding the activities so far and he was very delighted to hear that the market is stabilising at the level that it is right now and I am saying the parallel market currently stabilises between 380 and 385.

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