CBN injects $482.6 million into inter-bank market

In the first trading day of the week, the Central Bank of Nigeria (CBN) yesterday intervened in the inter-bank market with $482.6 million just as the series of injection may have cost the nation’s foreign reserves $493.72 million in 21 days.

A breakdown of Tuesday’s interventions shows that the retail Secondary Market Intervention Sales (SMIS) was allocated the sum of $285,779,350, while the $100 million was offered in the Wholesale SMIS auction window.

The Small, Medium and Enterprises (SMEs) window got an allocation of $52 million, while the invisibles segment, comprising Basic Travel Allowance (BTA), Personal Travel Allowance (PTA), medicals and tuition fees, among others, was allocated the sum of $45 million.

According to the Acting Director, Corporate Communications at the CBN, Isaac Okorafor, the interventions are in line with the bank’s resolve, echoed by the Governor, Godwin Emefiele, at last week’s briefing of the Monetary Policy Committee (MPC) meeting.

While expressing pleasure that the intervention of the bank had ensured stability across all segments of the forex market, Okorafor voiced his optimism that the bank’s objective of exchange rate convergence would be achieved soon.

Okorafor, therefore, reiterated his call to all stakeholders to play their respective roles in ensuring a smooth running of the foreign exchange market for the overall benefit of the economy.

Meanwhile, surveys in Abuja, Lagos, Kano and Port-Harcourt on Tuesday indicated that the dollar traded to the Naira at an average rate of ₦375/$1. But market regulator, FMDQ OTC Securities Exchange, said that the local currency was quoted at ₦380.33 per dollar at the investor window, while other reports said it was quoted at ₦382 a dollar on the black market, while commercial lenders quoted the local currency at 305.85 per dollar on the interbank market.

Recall that CBN has been intervening on the official market with a view to narrowing the spread between the official interbank and parallel markets. It has so far sold about $4 billion since February.

Meanwhile, the country’s foreign reserves has dipped by 0.87 per cent to $30.49 billion by May 25 from a month ago.This indicates that the reserves have shed a total of $493.72 million in the past 21 days.

According to data from the Central Bank of Nigeria (CBN), the reserves swung from a little over $30.988 billion on May 4, 2017 to $30,495 billion as at the close of business on Thursday May 25.

Within the same period, the CBN made numerous interventions in the foreign exchange market to keep the naira stable at about 375 to 380 per dollar at the parallel market.

The CBN governor, Mr. Godwin Emefiele, said after the last meeting of Monetary Policy Committee (MPC) that the bank’s forex policy actions have bolstered activities in the market, and brought an inflow of nearly $1.1 billion in four weeks via a single window.

He added that the bank would remain vigorous and intense of its current forex policy.

“I have said it and I will repeat myself that the interventions will be more vigorous and intense, to underscore the fact that we are determined to ensure that the Nigerian economy recovers, by making sure that foreign exchange is being made available to all sectors of the Nigerian economy to conduct their businesses,” Emefiele had said.

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