In continuation of its efforts in ensuring foreign exchange liquidity and dollar shortages, the Central Bank of Nigeria (CBN) on Friday, lifted the inter-bank forex market with total sum of $331.41 million, even as the nation’s external reserves rose by 0.27 per cent from a month ago to $47.62 billion as of May 30, CBN data showed over the weekend.
The apex lender explained that the funds were allocated to players in sectors in the Retail Secondary Market Intervention Sales (SMIS), which include companies in the agricultural, airline, petroleum and machinery sectors.
The last week sale of foreign exchange by the CBN came closely on the heels of its intervention in the wholesale segment of the market on Wednesday, May 30, 2018, when it pumped the sum of $210 million in the inter-bank forex market.
Confirming the releases, the Bank’s Acting Director, Corporate Communications, Isaac Okorafor said companies in the agricultural, airlines, petroleum products and raw materials and machinery sectors were the beneficiaries of the intervention.
Okorafor explained that the CBN continued to make interventions in the forex market in order to guard against illiquidity and checkmate actions of speculators that could mount pressure on the country’s reserves.
Reiterating the assurances of the CBN Governor, Godwin Emefiele, he said the Bank was buoyant enough to meet the foreign exchange requests of various customers cut across the different segments of the market.
He therefore urged every customer requiring foreign exchange to approach their respective banks with relevant documents to make formal requests, stressing that the authorized dealers had enough supply to meet every legitimate request.
Emefiele had paid unscheduled visits to some banks in Abuja, to monitor the extent of compliance with the CBN directive to deposit money banks (DMBs) in the country to buy and sell foreign exchange over-the-counter to traveling customers and non-customers of banks provided they present relevant and valid travel documents.
The CBN in that directive also mandated all Bureau de Change (BDCs) to henceforth access forex from the CBN, at least thrice weekly, failing which the CBN could review their licenses.
The Daily Times recalls that the CBN , on Wednesday, May 30, 2018 offered the sum of $100 million to authorized dealers in the wholesale segment of the market, just as the Small and Medium Enterprises (SMEs) segment and the invisibles window each received $55 million.
Nigeria’s forex buffer stood at $30.36 billion, up 57 per cent from a year ago, but is still far off a peak of $64 billion hit in August 2008.
Meanwhile, the Naira, last week exchanged at an average of N361/$1 in the BDC segment of the market across major cities in the country.
Nigeria, Africa’s largest oil producer, fell into recession in 2016 largely due to low crude prices. Lower oil revenues led to foreign currency shortages because crude sales are the country’s main source of foreign exchange.