Dealers Fail To Fully Absorb CBN’s $150m Offer At Inter-Bank Window

• Sells $25m In Investors, Exporters’ FX Window

The Central Bank of Nigeria (CBN) on Tuesday, said authorised foreign exchange dealers were unable to subscribe fully to its $150m offered at the previous day’s foreign exchange auction in the interbank wholesale window.
According to Isaac Okorafor, Acting Director of Corporate Communications at the CBN, the authorized dealers were only able to subscribe to the sum of $96.37m or 64.24% of the total offer in the inter-bank market on Tuesday, April 25, 2017.
He did not however disclose reasons for the inability of the authorized dealers to fully subscribe to the offer, but industry sources attributed the situation to another spell of surfeit of forex in the financial system
Market reports across Lagos, Abuja and Kano on Tuesday, April 25, 2017, also indicate that the Naira sustained its value in the forex market, selling at N379 to the United States dollar
Meanwhile, the apex bank commenced interventions in the new Investors’ & Exporters’ FX Window with the sale of $25m to customers through authorized dealers, even as Okorafor reiterated that the window was established to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.
According to him, transactions under the new window include invisibles such as loan repayments, loan interest payments, Dividends/Income Remittances, Capital Repatriation, Management Service Fees, Consultancy fees, Software subscription fees, Technology Transfer Agreements, Personal Home Remittances and any such other eligible transactions including ‘miscellaneous Payments’ as detailed under Memorandum 15 of the CBN Foreign Exchange Manual. It, however, excludes international airlines ticket sales’ remittances.
On the role of the apex bank in the market, Okorafor said the CBN would be a market participant at the window to promote liquidity and professional market conduct.
Meanwhile, interventions of the CBN in the investors’ and exporters’ forex window appear to have impacted positive on the Nigerian stock market with stocks recording spikes.
Industry watchers also believe that the new CBN window for investors and exporters will boost production with its attendant net effect of employment.

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