Naira Exchange Rate CBN expresses satisfaction with forex market on first day of new policy

“Nigeria’s new foreign exchange market made a robust take-off on Monday, June 20, 2016, clearing all the backlog of $4bn pent-up demand for foreign exchange, with the naira exchanging at 280 to the United States dollar," the CBN said.

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A trader changes dollars for naira at a currency exchange store in Lagos, Nigeria, February 12, 2015. REUTERS/Joe Penney/File Photo play A trader changes dollars for naira at a currency exchange store in Lagos, Nigeria, February 12, 2015. REUTERS/Joe Penney/File Photo
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The Central Bank of Nigeria (CBN), in a statement issued on Monday, June 20, 2016, expressed satisfaction with the performance of the forex market on the first day of the new policy direction, which the apex bank announced last week.

The CBN, via the statement issued by Mr. Isaac Okoroafor, acting director, corporate communications, said, “Nigeria’s new foreign exchange market made a robust take-off on Monday, June 20, 2016, clearing all the backlog of $4bn pent-up demand for foreign exchange, with the naira exchanging at 280 to the United States dollar.

Graph showing Naira/dollar exchange rate from June, 2015 till date play

Graph showing Naira/dollar exchange rate from June, 2015 till date

(bloomberg,abokifx)

 

The objectives of the CBN to clear the forex demand backlog, perform its role as strictly a market intervention participant, and re-launch a functioning and efficient interbank market were met.

ALSO READ: Currency loses 31% in value on second day of new CBN float policy

The CBN, in line with its desire to promote a transparent, liquid and efficient market, and in order to engender market confidence and ensure credible price formation, intervened in the market through a special secondary market intervention sales addressing the issue of the FX demand backlog by clearing $4.02bn through spot and forward sales.

CBN FX policy infographic play

CBN FX policy infographic

(Pulse/Orodata)

 

This served in no small way to stimulate price discovery, with the determination of a marginal rate of $/280.00 through the special SMIS process. So, we can state to you categorically that the FX demand backlog has now been cleared and behind us for good.”

Okoroafor assured the general public and stakeholders in the forex market that the CBN was committed to making the forex market globally competitive, credible and transparent.

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