The nation’s currency on Wednesday strengthen further against the US dollar as the Central Bank of Nigeria has reiterated its commitment to maintaining stability in the foreign exchange market.
Naira appreciated to N360.00k per dollar on Wednesday, gaining N0.05k over N360.05k traded the previous day at the investors and exporters forex window.
Godwin Emefiele, governor of CBN said on Tuesday that the I&E window has increased liquidity and boosted confidence in the market with over US$7.0 billion inflow in the last five months.
At the inter-bank spot market and the Bureau De Change (BDC) segment, the local currency traded stable closing at N305.80k per dollar and N365/$ respectively.
Members of the Monetary Policy Committee (MPC) which met on Monday and Tuesday noted the success of the Investor and Exporters’ window (I &E) of the foreign exchange market and traced this not only to foreign investor confidence but also to the zeal and commitment of Nigerian exporters who have demonstrated preference for the window to the parallel market.
They welcomed the gradual narrowing of rate spreads in the foreign exchange market and urged the CBN to continue to monitor and respond proactively to threats and vulnerabilities in the foreign exchange market.
The CBN restated its commitment to maintaining stability in prices, without which meaningful recovery cannot be achieved.
“The Committee will continue to introduce policies that will improve the confidence of foreign investors in the country’s macroeconomic management regime,” Emefiele said.
The Naira strengthened at all segments of the FX market this week as the CBN sustained pace of intervention while foreign investors positioned at primary market sale of T-bills held mid-week.
The CBN on Monday, September 25, 2017, boosted the forex market by offering a total of $195 million in three segments of the market.
In the wholesale Secondary Market Intervention Sales (SMIS), of the inter-bank Foreign Exchange market, it auctioned $100m and also intervened in the Small and Medium Enterprises (SMEs) and invisible segments, with the sum of $50 million and $45million respectively.
Despite the spate of FX interventions by the CBN, the external reserves have remained on the uptrend, reaching a 31-month high of US$33 billion as at September 15, 2017. This accretion to the reserves has been largely due to the stability in oil prices as well as improved production volumes and we believe this will give the CBN more impetus to continue with its interventions according to analysts at Afrinvest Securities limited.