CBN injects $180m into forex market to soak demand

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By Isaac Anumihe and Uche usim, Abuja

As part of efforts to increase liquidity in the foreign exchange market and firm up the naira against the greenback, Central Bank of Nigeria (CBN), yesterday released another $180 million into the system.
While $100 million is for  the wholesale forwards segment, an additional $80 million into the banks is for   the settlement of dollar demand for school fees, medicals and Personal Travel Allowance (PTA), among others.
In a statement, spokesman for the apex bank, Mr Isaac Okoroafor, said that its commitment to providing enough forex for legitimate businesses remains unshaken. He assured that CBN  would do “everything possible” to ensure the steady supply of forex to the market.
Recall  that efforts by the CBN in making available large amounts of forex to the market has led to the appreciation of the naira by over N85 in less than one week. There are fears in the market that the local currency may well be on a permanent journey to its natural value put by some analysts at less than N300 to the dollar.
The CBN had maintained that much of the dollar demand had been a bubble created by speculators and hoarders of the greenback. On a radio programme on Monday, the apex bank’s spokesman warned market players and dollars hoarders to make hay and sell their holdings in order to avoid heavy losses.
He explained: “I want to assure that we will provide enough liquidity in the market and we will sustain liquidity. The country’s economy is opening up and the foreign reserves are improving.
“Many people outside are beginning to realise the huge opportunities in this country. You can see the subscription of the Eurobond. It clearly shows the potential in this economy. “This economy is bottomless when it comes to investment opportunities. So, ultimately the exchange rate would improve and anybody hoarding the dollars would suffer for it. “The savings we have made from the elimination of the 41 items from the FX market have been very huge. Nigerians are beginning to adopt made-in-Nigeria products and indeed we have supported some local manufacturers.

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