Forex: Central bank opens week with $195m ahead of MPC decisions

The Central Bank of Nigeria (CBN) on Monday boosted the Foreign Exchange (Forex) market by offering a 195 million dollars in three segments of the Forex market. The acting Director of Corporate Communications, Mr Isaac Okorafor, in a statement, said it auctioned 100 million dollars at the wholesale Secondary Market Intervention Sales (SMIS) window of the inter-bank Foreign Exchange market. He said that the apex bank also intervened in the Small and Medium Enterprises (SMEs) and invisible segments, with 50 million dollars and 45 million dollars.

Okorafor reiterated that the Bank’s intervention was to maintain its commitment to sustain liquidity in the market to meet genuine requests as well as deepen flexibility in the foreign exchange market. He said the CBN would continue to work on achieving the objective of convergence of rates in the various segments of the market, and would continue to strive that the forex market guaranteed transparency in the sale of foreign exchange.

Okorafor said only last week, the CBN threatened to sanction any Deposit Money Bank (DMB) in breach of its earlier directive of March 3. The directive instructed them to, among other things, open teller points for retail Forex transactions and to have electronic display boards in all their branches, showing rates of all trading currencies. He said the bank’s firm position was to reiterate its commitment to ensure liquidity in the foreign exchange market, where all genuine requests would be met in line with extant forex guidelines, noting that it would foster more transparency and make the public become aware that the facilities existed.

This week’s intervention is significant, coming in the midst of the Monetary Policy Committee Meeting taking place on Monday and Tuesday. Monday’s sale follows the major intervention, last week, to the tune of 545 million dollars as the retail Secondary Market Intervention Sales (SMIS) received the largest intervention of 285 million dollars.

Other segments include the 100 million dollars offered for wholesale SMIS, 90 million dollars for Small and Medium Enterprises (SMEs) window and 70 million dollars for invisibles such as Basic Travel Allowances, tuition fees and medical payments.

Meanwhile the Naira closed at N363 to a dollar, N485 to the Pound Sterling and N433 to one Euro at the parallel market.