Following last Friday’s injection of $389 million into the retail segment of the forex market, the Central Bank of Nigeria (CBN) has intervened with the sum of $81.2 million in the invisibles and Small and Medium Enterprises (SMEs) segments just as the Naira was quoted N381 to the dollar in deals for investors two weeks after the central bank allowed investor trade in the currency at market-determined rates.
A breakdown of the CBN interventions indicates that the Bank provided the sum of $44 million to meet customers’ requests for invisibles such as Basic Travel Allowances (BTA), Personal Travel Allowances (PTA), medical bills and tuition fees, among others.
The apex bank Acting Director, Corporate Communications Mr Isaac Okorafor, confirmed the intervention, adding that the SMEs segment also received a boost of $37.2 million.
According to him, “the Bank remains committed to ensuring that there is enough supply of forex to genuine customers to achieve the goal of forex rates convergence”.
While expressing satisfaction with the current stability in the forex market, Okorafor reiterated his confidence in the ability of the CBN to sustain its interventions in the market.
It will be recalled that the CBN on Friday, May 5, 2017, sold a total sum of $389 million to authorized dealers in the retail sector of the market as spot and forwards. Of the sum, $87.885 was for spot sales, while $300.8 million was sold as forwards in three tenors of 30, 45 and 60 days, respectively.
Meanwhile, Trading sources said investors were demanding rates above N400 per dollar while locals were quoting rates as low as N350.
The central bank said in April it would allow investors to trade the Naira at market-determined rates, a move intended to improve the dollar supply and attract foreign investors.
The CBN said it has used the multiple exchange rate system to eliminate “frivolous demand” for foreign currency. The central bank has been selling dollars aggressively on the forward market with only tiny volumes on the spot market, using those sales to influence the Naira’s official value in a bid to narrow the currency spread with black market rates.
On Monday it offered $100 million in forwards. The Naira was quoted at N381.11 per dollar for investors on Monday, data from FMDQ showed. The official market rate was N305.20.
