CBN injects $210m into forex market as naira weakens

by | January 30, 2018 11:33 am


The Central Bank of Nigeria (CBN) on Monday, January 29, 2018, injected another sum of $210 million into various segments of the inter-bank market.

The nation’s currency on Monday maintained its stability but on a weakening level. The naira depreciated marginally by N0.02k to close at N360.37k on Monday, against the dollar from N360.35k/$ traded on Friday last week at the investors and exporters forex window, data from FMDQ show.

At the CBN official window, the naira was quoted at N305.75k per dollar on Monday, as against N305.70k last week Friday.

“We expect stability in the naira as global crude oil price retains its upbeat which should result in further build-up in foreign reserve”, analysts at Cowry Asset Management limited said.

Crude oil, which accounts for more than 90 percent of Nigeria’s foreign exchange earnings, stood at US$69.54 per barrel as at Monday January 29, 2018.

At Monday’s trading, the CBN offered the sum of $100,000,000 as wholesale interventions and allocated the sum of $55 million to the Small and Medium Enterprises (SMEs) forex window. Customers requiring forex for Business/Personal Travel Allowances, tuition and medical fees, among others, equally got an allocation of $55 million.

The Acting Director, Corporate Communications Department, at the bank, Isaac Okorafor, confirmed the sales, reiterating that the bank would sustain its interventions in the foreign exchange market.

He expressed optimism that the value of the naira will continue to spike in the face of accretion to the foreign reserves and the attendant reduction in the country’s import bill.

He attributed the stability in the market to the bank’s transparency and cooperation of authorised dealers and urged all dealers to continue to play by the rules, as the CBN would not hesitate to sanction any erring bank or dealer.

Meanwhile, the naira continued to maintain its stable run against major currencies around the globe, exchanging for N362/$1 in the BDC segment of the market on Monday, January 29, 2018.

Last week, the naira depreciated against the U.S. dollar at both the Investors & Exporters Forex Window (I&E FXW) and the Bureau De Change segment by 0.07% and 0.28% to N360.35/USD and N362.00/USD respectively on a week-on-week (w-o-w) basis. This was inspite of weekly injections by the Central Bank of Nigeria (CBN) worth USD210 million into the foreign exchange market of which USD 100 million was allocated to wholesale (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles. However, the naira closed flat against the U.S. dollar at both the interbank foreign exchange market and parallel (‘black’) market segments at N330/USD and N364/USD respectively.

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