CBN to inject more dollars into FOREX market to strengthen naira

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In continuation of its intervention in the foreign exchange market aimed strengthening the Naira against other international currencies, the Central Bank of Nigeria, CBN, plans to inject another $350 million to the market this weekend.

Godwin Emefiele, CBN Governor
Godwin Emefiele, CBN Governor

The bank says its recent intervention overwhelmed the market’s ability to absorb the inject funds.

Despite the placement of about $500 million in the first intervention by the bank shortly after the policy review was announced darker last week, the market could only absolve $350 million, it said.

In the foĺlow up placement of about $270 million, only $221million was taken up in the market.

CBN spokesperson, Isaac Okorafor, who spoke with PREMIUM TIMES in Sokoto on Friday, said the inability of the market to absorb the entire supply of dollars to the market was an indication that the suposed high demand for foreign exchange was artificially induced by speculators to spike the price for selfish reasons.

Following the CBN intervention in the market in the last two weeks, the value of Naira has strengthened significantly, from about N515 to the dollar to about $485 to the dollar in the first week.

The value has since been boosted to about N450 to the dollar in the second week.

A senior official of the CBN told PREMIUM TIMES the bank was committed to continuing its policy to supply more dollars into the foreign exchange market in continuation of its strategy to strengthen the value of the Naira.

The official, who requested that his name should not be disclosed because of the sensitive nature of the information, said the CBN planned to inject additional $350 million to the market this weekend.

The Naira lost about N7 to exchange at about N465 to the dollar after closing stronger at about N458 to the dollar on Thursday, while pouns sterling and the Euro exchanged foe N542 and N480 respectivelyq

With the planned fresh injection of foreign currency into the market, the total amount of supply of dollars would rise to about $570million this week alone, to further boost the value of the Naira against the dollar.

The CBN spokesperson said the sudden improvement in the value of the Naira, coupled with improving national reserve levels to about $29.6billion, showed the bank was determined to continuously make foreign exchange available to all genuine customers through their banks, advising those hoarding the greenback to reduce their losses by selling their dollar stock.

Part of the intervention with CBN in the last one week was $80million forpetent PTA, Medical fees and school fees, $100million wholesale forwards, while anothee $350 million would be placed in the market this weekend.

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