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HomeBankingCBN injects fresh $210m into forex market

CBN injects fresh $210m into forex market

The Central Bank of Nigeria (CBN) yesterday said it had injected a fresh $210 million into the interbank foreign exchange market as part of its continuing efforts to boost liquidity and alleviate dollar shortages.

Coming barely 48 hours after the apex bank pumped $304.4million into the interbank foreign exchange market, it means that the regulator intervened to the tune of $514.4million in the forex market between last Friday and yesterday.

In the statement announcing $210million intervention, the banking watchdog said it had released $100 million earmarked for the wholesale market, $55 million for small businesses and individuals, and $55 million for certain dollar expenses such as school fees and medical bills.

Figures obtained from the Bank’s last Friday’s $304.4million intervention indicate that the sum, as in previous interventions, were in favour of interests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

The CBN’s Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, confirmed the figures, reiterating that the objective of the apex bank remained to boost liquidity, production and trade.

He explained that the CBN would continue to ensure liquidity in the interbank sector of the market as well as sustain its interventions in order to drive economic growth and guarantee market stability.

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Speaking further, Mr. Okorafor expressed optimism that the Nigerian economy stood to gain massively from the Bank’s forex management strategy as could be seen in the accretion to the foreign reserves, which now stands at over $40 billion. According to the Managing Director, Afrinvest Securities, Mr. Ayodeji Ebo, the CBN, between April and December last year, spent $15.9 billion in its weekly intervention in the forex market. He disclosed this while speaking at the Finance Correspondents Association of Nigeria (FICAN) Economic Outlook with theme: “Nigeria Economy and Financial Market Outlook: 2017 Review and 2018 Outlook” held at the FICAN Centre in Lagos last Thursday. Eboh said the figure was an improvement compared to the $9.6 billion spent during same period of 2016. New Telegraph had reported last week that the recent rally in crude oil prices to about $70 per barrel was fuelling speculation in industry circles that an appreciation of the Naira could be imminent.

A Lagos-based Bureaux De Change (BDC) operator, Mr. Mathew Oshobugie, said that the naira could strengthen on the parallel market to N359 per dollar this week from N360/$1 last week due to a significant drop in demand for the greenback. According to analysts, the Naira will remain in uptrend in the coming weeks as the CBN’s dollar buffers (external reserves) continue to rise fuelled by rising oil prices.

Since rising above the key $50-a-barrel mark last September, oil prices have steadily climbed to, and remained at the $69-$70 range in recent weeks. As a result of this development, Nigeria, which relies on crude exports for over 90 per cent of its forex earnings, has seen the country’s external reserves rising to a four-year high of $40.4billion, according to latest data released by the CBN.

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