Global Bank urges effective Forex system, as CBN injects $100m into Interbank Market

The global development bank, World Bank Group, has called on Nigeria’s Monetary authorities to urgently considered forex reforms to avoid future financial crisis.

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The World Bank’s Chief Economist for Africa, Albert Zeufack, said on Wednesday, April 19, 2017 that the current exchange rate adjustments could lead to higher inflation rate as current monetary policy tightening could pressure price.

Making fiscal adjustment in the country’s second year of recession would now be extremely challenging, Zeufack said during a video conference with reporters from Washington.

Also, the Central Bank of Nigeria (CBN) yesterday, Wednesday, April 19, 2017, continued its wholesale injections into the interbank Forex market by offering a total sum of $100m to authorized dealers to meet the 7 to 15-day forwards requests of customers.

The Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, also disclosed that the banks and authorized dealers were only able to pick up $68.51 million of the $100 million.

He also disclosed that the CBN will on Thursday, April 20, 2017 continue its sale of $20,000 to Bureax de Change (BDCs) for onward sale to small-end users.

The spokesman also reiterated the determination of the CBN to continue to intervene in the various sectors of the interbank forex market in order to guarantee access to all categories of customers requiring forex for legitimate obligations and ultimately ensure stability in the forex market.

The country’s currency, Naira, maintained its gaining strands against the dollars at the close of business on Wednesday, April 19, 2017 by appreciating 1.27 percent to close at N390 per dollar on the parallel black market.

The central bank has been intervening on the official market to try to narrow the currency's spread with the black market rate, which was 520 to the dollar in February after it devalued the naira for retail customers to 375.

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