22 August 2017

Nigeria: CBN Intervenes With Fresh U.S.$195 Million

The Central Bank of Nigeria (CBN) on Monday offered a total of $195million in three segments of the interbank foreign exchange (forex) market.

In the wholesale segment of the market, it auctioned $100 million and also intervened in the small and medium enterprises (SMEs) and invisible segments, with the sum of $50million and $45million respectively.

The acting Director, Corporate Communications Department, Mr. Isaac Okorafor, said that despite the pressure in the market from those seeking forex for school fees and vacations, the Bank has kept faith with its resolve to ensure that there is sustained liquidity in the market and ensure that genuine requests for forex are met.

He pointed out that there have been improved liquidity and flexibility in the market.

The latest intervention comes on the heels of last week's intervention in which the retail secondary market intervention sales (SMIS) received the largest allocation of $264,192,252.95 and the authorised dealers in the wholesale window had the sum of $100,000,000.

The CBN had in a bid to improve forex availability in as well as to ameliorate challenges encountered by critical stakeholders, last week directed that payment for port charges to the Nigerian Ports Authority (NPA) and other agencies by oil marketing companies would henceforth be accommodated by the Bank using Form 'A'.

It anticipated that the move would go a long way in speeding up operations at the ports, thereby enhancing the ease of doing business in the country.

Nigeria's forex stood at $31.591 billion as at August 18. The accretion of Nigeria's forex reserves, which started this year has continued as figures released by the Central Bank of Nigeria (CBN) showed that reserves has grown by $1.263 billion this quarter. This signified a steady improvement in the country's current account balance, despite the threat from United States shale oil.

The growth in the reserves was also influenced by the drop in militancy in the Niger Delta and rising oil exports, which have led to an improvement in the country's earnings.

The improved crude earnings reflected in the amount of funds disbursed by the Federal Account Allocation Committee (FAAC) which climbed to total of N3.010 trillion to the three tiers of government between January and June this year; figures compiled by THISDAY had shown. The amount shared by the three tiers of government was significantly higher, compared with the N2trillion allocated to them in the first half of 2016. The naira traded at N367 to the dollar on the parallel market yesterday.

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