Here is why Nigeria's central bank will continue to intervene in forex market - whenever and wherever

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April 25, 2018 9:13 AM

The central bank of Nigeria injects another $210 million into forex market as the country’s reserves soar closer to the $50 billion mark

The Central Bank of Nigeria (CBN) has intervened, yet again, in the wholesale segment and other sectors of the foreign exchange market to the tune of $210 million.

The Apex bank in a statement released on Tuesday, April 24, 2018, revealed that the Wholesale sector of the market got another injection of $100 million, just as the Small and Medium Enterprises (SMEs) and invisible sectors each received $55 million.

Isaac Okorafor, the Acting Director, Corporate Communications Department at the CBN, while confirming the figures, said that Tuesday’s interventions, like the previous intermediations, were in line with the Bank’s commitment to sustain the high level of stability in the Forex market and continually ease access to the currency by those requiring it for genuine activities.

Why CBN keeps intervening at forex market

Okorafor said the CBN was ready to inject funds into the market, whenever and wherever necessary, in order to maintain market stability as well as sustain the financial system.

He also said the financial regulator was further buoyed by recent gains in the foreign exchange sector, which had seen the country’s reserves soar closer to the $50 billion mark.

Speaking further, Okorafor said the country’s reserves continued to enjoy accretion, adding that the present reserve's status at the Bank meant that the CBN was capable of sustaining foreign exchange liquidity in the system.

Forex market as on Tuesday

Tuesday’s intervention came as one United States Dollar (US$1) exchanged for N363 on the street segment of the forex market

At the Importer and Exporter Window (I&E FX Window), the Naira gained 0.15% to close at N360 to the dollar and closed flat at the official Central Bank window at N305.65 to the dollar

Meanwhile, it will be recalled that the CBN in its last interventions on Friday, April 20, 2018, injected the sum of $396.18million into the Retail Secondary Market Intervention Sales (SMIS).

Nigeria’s reserves

Nigeria's foreign exchange reserves stood at $47 billion as of April 16, 2018, according to data from the Central Bank of Nigeria.

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