Black market dead says CBN as FX reserves rise to $33bn
The Central a Bank of Nigeria (CBN) on Thursday announced that the external reserves has risen to $33 billion, a high of 31 months.
The increases in the foreign exchange reserves were attributed to oil prices increase and relative stability in the Niger Delta.
Isaac Okorafor, acting director, corporate communications department made this known to newsmen at the ongoing seminar for Finance Correspondents and business editors in Awka Anambra State.
The CBN also pronounced as dead, the unregulated parallel market widely called black market.
Okorafor, explained that the strategy used in liquidating the parallel market is rooted in the action taken by the CBN when it liberalized the access to foreign exchange for those wanting to buy foreign exchange for invisible transactions.
This opened up a new accessible window in money banks with aggressive supply of FX to that window by the CBN.
Invisible transactions include Personal Travel Allowance (PTA), Business Travel Allowance (BTA), school fees, and medical.
Okorafor said such singular action of the CBN moved demand away from black market to banks and completely decelerated the parallel market.
Godwin Emefiele, governor of CBN had early this year said that the rise in oil prices have seen foreign exchange inflows through the CBN jump by well over 82 percent while foreign reserves which had dropped to their lowest levels last year peaked to the current level.
The price of Brent crude oil rose to $55.79 as at yesterday September 14, 2017 giving the apex bank more ammunition. Crude oil account for more than 90 percent of Nigeria’s foreign exchange earnings.
The National Bureau of Statistics (NBS) recently released the capital importation report, which indicated that investment inflows into the country rose by 95.02 per cent from $884.1m in the first quarter of this year to $1.79 billion in the second quarter.
Analysts said that the renewed increase in the country’s foreign exchange buffer will help boost investor confidence in the economy.
Risks to the rising external reserves, according to analysts, include stalled or disappointing borrowing plans and further disruptions to Nigeria’s oil production.
Emefiele had said the CBN will continue to provide dollars with priority given to manufacturing industries needing to import raw materials and spare parts. He added that the Apex bank would “from time to time” intervene in the foreign exchange market to ensure the (official) exchange rate did not go beyond its expectations.
Hope Moses-Ashike and Onyinye Nwachukwu
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