Naira Sells At N376/$, Amidst CBN’s Sustained FX Market Interventions

After a momentary relapse, the Naira firmed up at the Bureau de Change (BDCs) segment on Thursday, April 20, 2017, trading at between N376 and N378/$ in Lagos, Abuja and Kano, from over N405/$ on Monday in apparent reaction to the sustained interventions by the Central Bank of Nigeria (CBN).
At the parallel market, the Naira gained N5, selling at N385/$ from previous day’s N390, and N25, from its N410/$ last week Thursday.
In the same way, the Pound Sterling closed at N495, from Wednesday’s N495 and N500 a week ago; while the Euro exchanged at N410, from N425 a day earlier, and N435 a week ago.
The CBN continues to flood the market with forex in keeping to its promise of being able to meet all legitimate forex demands. It even provided customers with a helpline to report any authorised dealer that fails to meet genuine demands for forex within 24 hours.
To ease its operations, the apex bank has deliberately segmented the market into Bureaux de Change (BDCs), Small and Medium scale Enterprises, as well as the Wholesale segment to which it continues to make supply available.
Perhaps, as a mark of the success of this endeavour, for the second time in weeks, banks and other authorized dealers were unable to to pick up the entire $100m supplied as part of the spot wholesale interventions in the interbank FOREX offered on Wednesday, April 19, 2017, to meet the 7 to 15-day forwards requests of their customers. They could only suck $68.51m.
This may not be unrelated to the injection of $280m into the Foreign Exchange Market a day earlier.
The apex bank has continued to sell $20,000 every Thursday to BDCs for onward sale to enable small-end users meet demands for invisibles such as tuition fees, medical bills, BTA and PTA.
Observers believe this multi-pronged approach is responsible for the appreciation of the Naira, even as the Naira is expected to appreciate further when the BDCs begin to disburse this week’s tranche of $20,000 purchases from the CBN.
It will be recalled that the CBN in its bid to sustain supply of liquidity to the foreign exchange market, made special interventions by simplifying the documentation process for the SMEs to enable them import eligible items and also increased both the amount and number of sales to the BDCs.

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