Thursday, April 22, 2021

CBN auctions $418m to aviation, oil, agric sectors

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Jaafar Jaafarhttps://dailynigerian.com/
Jaafar Jaafar is a graduate of Mass Communication from Bayero University, Kano. He was a reporter at Daily Trust, an assistant editor at Premium Times and now the editor-in-chief of Daily Nigerian.
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The Central Bank of Nigeria, CBN, has  auctioned $418 million  at a marginal rate of N310 to a dollar, to airlines, agriculture, petroleum and raw materials sub sectors.

The CBN spokesman Isaac Okoroafor said in Abuja the $480m offered last week was  in addition to the $350 million  sold as wholesale auction for travel allowance and school fees at the same period.

He said that in the weeks ahead, the CBN would further sustain its intervention through the sale of foreign exchange to all segments of the market, like the interbank and the Bureau de Change segment.

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“The Bank will sell short tenured forwards of 7 to 30-day maturity to meet demand of manufacturers and all other foreign exchange users.

“These significant injections of foreign exchange into the market should reassure all foreign exchange users of our determination to continue to meet all legitimate forex demand in the market,” he said.

Mr Okoroafor reiterated the bank’s commitment to achieving exchange rate stability in the Nigeria market.

The CBN in recent months had injected dollars  to the inter-bank and Bureau de Change foreign exchange market in its bid to sustain forex supply to different categories of users.

READ  Naira weakens marginally against dollar at parallel market

This translated to the appreciation of the naira from an all time low of about N560 to a dollar, to N355 within two months.

However, in the last two weeks, the naira began to weaken again against the dollar, which was attributed to alleged hoarding of the greenback by commercial banks, and insufficient supply to the BDC segments and other stakeholders.

READ  Naira loses marginally against dollar at parallel market

To remedy this, the CBN had threatened to penalise any bank refusing to sell forex to customers.

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Also, forex supply to the BDC was increased from 8,000 dollars per week to 10,000 dollars.

The N=naira now sells at N405 to a dollar in the parallel market.

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