Forex market gets fresh $255m as CBN seeks rate convergence

Ahead of the outcome of the ongoing monetary policy committee (MPC) meeting in Abuja, the Central Bank of Nigeria (CBN) again injected over $255 million in to the foreign exchange market.

The action, which traders regarded as a “another massive intervention” is aimed at driving the CBN’s goal of rate convergence, which experts say the MPC is seriously deliberating. The intervention shows that the sum of $100 million was released for the wholesale segment of the market for both spots and forwards. Also, basic travel allowance (BTA) which comes under invisibles segment garnered $50 million while the small and medium scale enterprises (SME) segment got $55 million. Meanwhile, the exchange rate convergence expectation of the CBN is fast being attained with the naira exchange rate hovering between N375 and N385 to the dollar.

Isaac Okorafor, the acting director, corporate communications department at the CBN, told reporters in Abuja that the investors and exporters segment of the market had so far recorded a trade volume in the sum of $1.1 billion from both the CBN and autonomous windows. He said this is an indication of the appreciable level of confidence in the foreign exchange management by foreign investors and autonomous suppliers of foreign exchange to the market.