Naira gains as CBN offers $450 million in one week

The naira strengthened further against the dollar at the weekend as it exchanged for N365 per dollar at the parallel market, following two interventions by the Central Bank of Nigeria (CBN), which totalled $449.3 million.

At the weekend, the apex bank injected $254.3 million towards the end of daily transactions, which is expected to keep the market liquid and out of speculative attack until weekly transactions resume today.

The interventions, although decreasing in number and volume, according to some experts polled by The Guardian, may be signs of test of the market independence, just as the naira has remained relatively stable in the in the last four weeks, oscillating between N364 and N370 per dollar.

So far, not less than $2.5 billion has been traded at Investors and Exporters window, which exchange rate hovers around N368 and N370 per dollar, with less than 30 per cent of the funds offered by CBN. Experts said it it is an indication of returning confidence in the market.

According to a CBN source, the deals in the retail window represent requests from the various sectors in the Secondary Market Intervention Sales (SMIS), thereby providing a boost to the respective sectors.

However, the Acting Director, Corporate Communications at the CBN, Isaac Okorafor, while confirming the intervention, explained that the sale was in response to bids received from authorised dealers, on behalf of their customers, as announced in the middle of the week.

The deal covered companies in the raw materials, agriculture, airline and petroleum industry.
Earlier in the week, the apex bank announced bids for retail auction by authorised dealers in the inter-bank foreign exchange market, following a $195 million intervention in other segments of the market at the beginning of the week.

With the intervention, authorised dealers in the wholesale window were offered the sum of $100 million, while $50 million was allocated to the Small and Medium Enterprises (SMEs) window and $45 million went to invisibles such as Basic Travel Allowance, tuition and medical bills.

Guardian

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