30 January 2018

Nigeria: CBN Sells $514 Million in Two Trading Days

In just two trading days, Friday and yesterday, the Central Bank of Nigeria (CBN) made a $514.4 million intervention in the foreign exchange (forex) market.Of the amount, the sum of $210 million was sold yesterday in various segments of the inter-bank market, as a boost to the weekend's offer of $304.4 million.

Consequently, the local currency has traded stably in the past four trading days till date, hoving around N305 and N305.70 per dollar at the official segment; N364 at the parallel market and N360-N360.37 at the popular Investors' and Exporters' (I&E) window.

Similarly, the continuous intervention and resulting increased liquidity have spurred investors- local and international, to increase their bet in the economy, as yesterday transactions showed an average deal of $655.72 million at the I&E segment, according to FMDQ OTC Securities Exchange data.

Specifically, CBN offered $100 million as wholesale interventions and also allocated $55 million to the Small and Medium Enterprises (SMEs) forex window, while requests for Business/Personal Travel Allowances, tuition and medical fees, among others, got $55 million.

By the figures obtained from the apex bank, last weekend's interventions were in favour of interests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

CBN's Acting Director, Corporate Communications Department, Isaac Okorafor, who confirmed the sales, reiterated that CBN would sustain its interventions in the foreign exchange market.He expressed optimism that the value of the naira will continue to spike in the face of accretion to the foreign reserves and the attendant reduction in the country's import bill.

Okorafor also expressed optimism that the Nigerian economy stands to gain massively from the forex management strategy as could be seen in the accretion to the foreign reserves, which now stands at over $40 billion.While also attributing the stability in the market to the bank's transparency and cooperation of authorised dealers, he urged all dealers to continue to play by the rule, as the CBN would not hesitate to sanction any erring bank or dealer.

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