The Central Bank of Nigeria, CBN, has pumped a total $380million within two days into the Foreign Exchange Market. And the effect: a further strengthening of the naira.
The first tranche of $280m was released on Tuesday, On Wednesday, the bank offered additional $100 million to authorised dealers to meet the 7 to 15-day forwards requests of customers.
Spokesman to the CBN, Isaac Okorafor, in a statement on Wednesday disclosed that the banks and authorised dealers were only able to pick up $68.51 million, out of the $100 million offered.
Mr Okorafor attributed the inability of the authorised dealers to fully subscribe to the CBN to a surfeit of forex in the system, which may lead to further appreciation of the naira.
According to him, the trend monitored by the Bank indicated that deposit money banks were now able to meet the forex demands of their customers within the time frame stipulated by the CBN.
He said that the CBN will on Thursday, continue its sale of 20,000 dollars to Bureaux de Change (BDCs) for onward sale to small-end users.
Mr Okorafor said feedback on the Bank’s forex new window for Small and Medium Enterprises (SMEs) in the country revealed that majority of small importers were heading for a major boost in their activities.
This he said was responsible for the current appreciation of the Naira, stressing that the naira will continue to gain strength with the relentless efforts of the CBN to to supply the market with forex.
The spokesman also reiterated the determination of the CBN to continue to intervene in the various sectors of the interbank forex market in order to guarantee access to all categories of customers requiring forex for legitimate obligations.
The News Agency of Nigeria reports that the naira on Wednesday closed at N390 at the parallel market and N306 to a dollar at the interbank market on Wednesday.
Meanwhile the World Bank has applauded the strategy of the CBN to increase sales of foreign exchange to the interbank market, Bureau de Change as well as other segments.
It however, stressed the need for the CBN to ease restrictions on access to foreign exchange, which continues to hinder rigorous economic recovery in the country.