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Eid-el Kabir: CBN saves Naira from looming drop, injects $547m in one week

 Naira closes at 365 at parallel market, steadies at NAFEX
In order to save the Nigeria currency, Naira, from a looming fall during the long holiday declared by the Federal Government of Nigeria for this year Eid-el- Kabir celebration (Muslim festival), the Central Bank of Nigeria (CBN) on Thursday, gave the currency breath of live with fresh injection of $297million, totaling $547million into the foreign exchange market in one week.

This is even as the Naira, further extended gains at both the parallel market and at the Nigeria Autonomous Foreign Exchange Fixing (NAFEX) window, while traded at 365 to the dollar at parallel market against 366 on Wednesday and remained unchanged at 359.00 at the autonomous window.

However, with this new forex intervention, the retail Secondary Market Intervention Sales (SMIS) segment of the forex market received a boost on the last trading day of the week, while the total intervention for the week hit $547million.

Confirming the figures, the CBN spokesman, Mr. Isaac Okorafor, the Acting Director, Corporate Communications Department disclosed that the Bank was resolute in its determination to intervene in the forex market with the aim of uplifting the naira exchange rate, boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

The spokesman also expressed confidence that the interventions will continue to guarantee stability in the market and ensure availability to individuals and business concerns with genuine demand for Forex transactions.

It will be recalled that the apex bank had, on Monday, intervened in the Inter-Bank Foreign Exchange Market to the tune of $195m in three segments.

In the wholesale segment of the inter-bank Foreign Exchange market, it sold $100m and also uplifted the Small and Medium Enterprises (SMEs) and invisible segments, with the sum of $50m and $45m respectively.

Okorafor, while responding to media enquiries earlier in the week had hinted that the apex bank would increase liquidity in the market in the coming days, noting that the move by the CBN is necessary to enhance stability in the FX market.

It would be recalled that the apex bank on Monday; intervened in the market with $250m, as the Small and Medium Enterprises got $100m; and invisible segments uplifted with $85m and $65m respectively.

Mr. Okorafor said that the apex bank would pump even more liquidity into the market in the coming days, noting that the move by the CBN was necessary to enhance stability in the foreign exchange market.

He reiterated that in a bid to improve liquidity and ameliorate challenges encountered by critical stakeholders at this time of the year, the bank had ensured that pressures on the market from those seeking Forex for school fees and vacations were eased.

Meanwhile, the latest Central Bank data showed on Thursday that the nation’s foreign exchange reserves stood at a two and a half-year high of $31.59 billion, indicated the same level it stood as at January 2015.

Nigerian assets, largely shunned by foreign investors over the past three years, have attracted significant amounts of capital after the central bank, in April, liberalised the exchange rate for investors.

Nigeria’s forex buffer stood at $25.73 bn, up 20.77 per cent from a year ago, but is still far off a peak of $64bn hit in August 2008.

 

 

 

 

 

 

 

Stories by Motolani Oseni

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