Naira Strengthens as CBN Offers $100m in Wholesale Forwards

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Chika Amanze-Nwachuku

The naira sustained its gains on the parallel market thursday, where it closed at N380 to the dollar, stronger than the N383 to the dollar the previous day.

This is as the Central Bank of Nigeria (CBN) yesterday offered $100 million to authorised dealers to meet the requests of wholesale customers at the forex auction in the interbank wholesale window.

The CBN spokesman, Isaac Okorafor, who disclosed this in a statement, stated that no intervention was made in the retail window in yesterday’s auction.

He however, disclosed that the bank continued its weekly sale of forex to the Bureau de Change (BDC) segment to meet the needs of low-end users.

Furthermore, he said the CBN had observed that quite a good number of dealers were adhering to the forex guidelines. Nevertheless, he said the CBN would continue to monitor the activities of authorised dealers to ensure that no outfit or individual circumvents the laid down forex rules.

While urging all concerned to put the Nigerian economy first, he reiterated that the CBN was determined to guarantee the international value of the naira.

In line with assurances by CBN Governor, Mr. Godwin Emefiele, that the CBN will continue to intervene in the foreign exchange market, the bank last Wednesday auctioned the sum of $185.86 million through retail Secondary Market Intervention Sales (SMIS).

The bank also on Wednesdaysettled the 10th Over-the-Counter (OTC) foreign exchange (FX) Futures Contract valued at $965.29 million which matured on the FMDQ OTC Securities Exchange. The FMDQ revealed this on its website.

Okorafor while confirming the last Wednesday auction sale, disclosed that out of the auctioned amount, only $3.14million was sold as spots, while the sum of $182.72million was sold as forwards.

He further explained that the overall picture of the inter-bank forex market was that of optimism, going by the level of access now being enjoyed by different categories of customers in both the wholesale and retail segments of the market.

The CBN governor had given a firm assurance of the imminent end of the current recession in 2017, at the end of his meeting with intervention in the forex market.

Emefiele declared that the bank will continue its relentless hinged the optimism of the CBN on the accretion to the country’s foreign reserve, which he said currently hovered above the $31billion mark.

According to him, “Our reserves stand at above $31 billion and that provides us enough of firepower or ammunition to be able to defend the currency, and we will do so with all intensity to ensure that foreign exchange is procured by everybody.”