CBN Injects $331.41m Into Currency Market

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The Central Bank of Nigeria (CBN) on Friday injected $331.41 million into the interbank foreign exchange market, continuing its efforts to boost liquidity and alleviate dollar shortages.

The bank said the funds were allocated to companies in the agricultural, airline, petroleum and machinery sectors.

This is as the country’s foreign exchange reserves rose 0.27 per cent from a month ago to $47.62 billion as of May 30, CBN data showed on Friday.

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.

Friday’s sale of foreign exchange by the CBN came closely on the heels of its intervention in the wholesale segment of the market on Wednesday, when it pumped the sum of $210 million in the inter-bank forex market.

The Central Bank “buoyant enough to meet the foreign exchange requests of various customers cut across the different segments of the market”, said its spokesman Isaac Okorafor.

Okorafor said companies in the agricultural, airlines, petroleum products and raw materials and machinery sectors were the beneficiaries of the intervention.

He 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 charged 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.

Mr. Emefiele had last Monday 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 Bank, on Wednesday, May 30, also 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.

Meanwhile, the Naira, on Friday, exchanged at an average of N361/$1 in the BDC segment of the market across major cities in the country.

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