CBN offers $367m for forex forwards

CBN offers $367m for forex forwards
CBN Governor, Godwin Emefiele

The Central Bank of Nigeria on Monday said it carried out another round of retail intervention in the interbank foreign exchange market by providing a total of $367,134,329.93 to meet the forward requests of customers.

A breakdown of the funds shows that the sum of $144,073,753.07 was for 45 days, while $223,060,576.86 was for 60 days.

A statement by the CBN’s Acting Director in charge of Corporate Communications, Isaac Okorafor, said the move was in line with the bank’s determination to ease the foreign exchange pressure on various sectors through forward sales under the new flexible forex regime to keep the market liquid.

Since the modification of the foreign exchange policy by the CBN, over $1bn had been made available to meet the needs of various users of foreign exchange.

During the first intervention in the forex market last week, the CBN offered $500m for sale to banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.

At the second intervention, a total of $221.3m was made available to 16 banks for forward sales to end-users of forex.

Okoroafor assured that the CBN would continue to make interventions based on qualified bids from the banks on the requests of their customers.

He reiterated that the CBN was more than ever ready to support the inter-bank market by ensuring liquidity and transparency to guarantee efficiency in the forex market.

Okorafor therefore urged all market participants to contribute their patriotic quota and assist in ensuring that the new measures put in place by the CBN guarantee the stability of the financial market as well as the growth and development of the economy to the benefit of all Nigerians.

Meanwhile, the interbank forex market traded $540,000 on Monday in early deals at N375 per dollar, near a record low exchange rate hit last November, Thomson Reuters data showed.

The local currency traded at a record low of 375.50 to the dollar last November on the official interbank market before it reversed the losses.

Traders said banks were selling dollars bought from international money transfer agents to retail customers at N375.

The interbank market traded a total of $3.77 million at multiple exchange rates on Monday, the data showed. It was quoted at 305.25 per dollar at 9:51 am.

In February, the central bank effectively devalued the naira for private individuals, offering to sell the currency at around half the premium charged on the black market, in a bid to narrow the spread on the unofficial market.

The currency was quoted at 465 on the black market, 1.5 per cent down from Friday’s close, as pressure was starting to pile up in that market segment despite a series of central bank intervention on the official market to boost liquidity.

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