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Naira appreciate as CBN injects $389 million into Forex Market
Since the CBN announced the adoption of a control exchange rate, the bank has a cumulative forex supply of $3.61 billion since February 20, 2017.
CBN Governor, Mr. Godwin Emefiele and President Buhari during recently meeting.
The Nigerian currency appreciated marginally by 0.10% as it opened the market last week at N305.70/$1 and settle at N305.70/$1 after the close of market on Friday, May 5, 2017. Also, at the parallel (black) market Nigerian Naira maintained its value at N391/$1 all through the week.
The CBN has since February 2017 adopted a “Control Exchange rate System”, which led to the apex bank creating multiple exchange rates and injecting dollars into the market in order to stabilise the local currency against the greenback. The CBN in April 2017 injected a total of $1.2 billion in April into the interbank market.
Continuing this trend, the retail segment of the interbank forex market received a huge boost of $388.66 million from the CBN on Friday, May 5, 2017.
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The Acting Director, Corporate Communications Department at the CBN, Isaac Okorafor, confirmed the numbers and disclosed that the sum of $87.885 was for spot sales, while $300.8 million was sold as forwards.
In the same vein, there were also strong indications at the weekend that the CBN plans to inject more forex through intervention segments of the market thereby heightening expectations that the naira will appreciate significantly during the week.
Laying credence to this information, Mr Isaac confirmed the anticipated interventions in most segments of the market during the week, with effect from today, May 8, 2017.
According to him, “the Bureaux De Change (BDC) and the Small and Medium Scale Enterprises (SMEs) along with other major segments will also receive adequate intervention with a view to providing liquidity in the entire forex market.”
Stakeholders in the Nigerian Manufacturing industry have praised position of the apex bank as regards easing the forex constraints of SMEs. The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadiri, noted that “the recent pronouncement of the CBN comes as a relief. If the intervention is sustained, there’s no doubt that we will have continued improvement in sourcing raw materials.”
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The cumulative forex supply since February 20, 2017, by the CBN is estimated at $3.61 billion.
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