Forex: Central Bank injects fresh $100 million into interbank market

Central bank of Nigeria (CBN)
Central bank of Nigeria building

Consistent with its pledge to sustain its intervention in the foreign exchange market to boost the inter-bank market and enhance the value of the Naira against other international currencies, the Central Bank of Nigeria, CBN, on Thursday injected another $100 million to meet the requests of wholesale customers.

Out of the amount, about $91 million was taken by buyers.

Close followers of the foreign exchange market said on Thursday that the speed at which customers swooped on the available supply was indicative of the growing apprehension by forex dealers who are anxious to dispose the stock at their disposal in anticipation of a further crash in the dollar value in the market.

“Since the CBN began its direct supply of dollars to the interbank market, there has been so much uncertainty. Nobody seems to know what is going to happen the next moment with the value of the dollar.

“We the dealers are anxious to dispose whatever we have at our disposal, because we do not want to suffer a loss,” Auwal Mustafa, a forex dealer in Wuse Zone 4 in Abuja said on Thursday night.

The Central Bank spokesperson, Isaac Okorafor, said the dealers would have value for their respective bids on Friday, March 24, 2017.

Mr. Okorafor said the highest and marginal bid rates were N330 to the dollar and N320 to the dollar, respectively.

He said no intervention was made on Thursday by the Bank to meet requests for invincibles, including basic and personal transport allowance, school fees and medical fees by customers.

Meanwhile, reports in Abuja and Lagos on Thursday showed that the Naira continued to firm up against major currencies, especially the dollar.

Some customers said they bought from the streets at the rate of N390 to the dollar, a development that stirred apprehension among speculators, who anticipate huge losses in the face of continued reduction in dollar value.

During the last Monetary Policy Committee meeting in Abuja, the CBN Governor, Godwin Emefiele, told reporters the Bank would sustain its forex intervention efforts.

He said he was optimistic the exercise would lead to the convergence of the forex rates between the interbank and the bureau de change rates.

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