• Naira lifted Again As CBN Injects $418m
The Central Bank of Nigeria (CBN) on Tuesday in Abuja said it has in the eight weeks since the April 21 introduction of the Investors’ & Exporters’ (I&E) Foreign Exchange Window cumulatively intervened to the tune of $2.2bn.
This, the bank said in a statement, has given a liquidity boost to the nation’s forex market, ensuring timely execution and settlement of eligible transactions.
According to a breakdown obtained from the CBN, the retail segment of the market received the highest intervention with a total of $226m, followed by the wholesale window’s $100m allocation, while the Small and Medium Enterprises (SMEs) window got $50m. The invisibles segment, comprising Business/Personal Travel Allowances, school tuition and medicals, among others received the sum of $42m to enable authorized dealers meet the demands of their customers.
The increased volume of transactions in the I&E segment is widely seen as a positive sign of the return of confidence in the financial markets which continues to reflect in the stock market’s All-Share index, which has over the past few months been on a rebound, becoming Africa’s best in terms of returns on investment, according to data by africanmarkets.com.
Investor sentiments, analysts believe had become stronger since the CBN established the I&E FX window, which they agreed had ensured greater flexibility in forex rate determination. They, however, urged the CBN to continue its march towards the convergence of rates.
Also, in line with its resolve to defend, stabilize and enhance the value of the Naira against major global currencies, the CBN on Tuesday injected another $418m into various segments of the inter-bank Foreign Exchange market.
Tuesday’s intervention is coming barely 24 hours after the apex bank on Monday, June 12, 2017, injected the sum of $413.5m into the inter-bank market in its bid to guarantee liquidity in the market as well as shore up the international value of the naira.
A breakdown of Monday’s figures shows that the apex Bank offered the sum of $100m to authorized dealers in the wholesale window, while the Small and Medium Enterprises (SMEs) window was allocated a total of $28m. The invisibles segment was allocated the sum of $25.5m to meet the needs of customers in that sector.
Meanwhile, Isaac Okoroafor, Acting Director of Corporate Communications at the apex bank expressed optimism that the interventions will continue to guarantee stability in the market and ensure availability to individuals and business concerns.
Reacting to the sustained interventions, the naira remained stable with a high possibility of further strengthening in the FOREX market on Tuesday, June 13, 2017, exchanging at an average of N363/$1 in the BDC segment of the market.
