CBN intervenes in forex market with $500m

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…$370.9m cash backed    •As Ajimobi predicts Naira rise in 6 months

From Oluseye Ojo, Ibadan, and Perpetua Egesimba, Lagos

The Central Bank of Nigeria (CBN) Tuesday announced a $500 million intervention in the foreign exchange to further boost the liquidity of authorised dealers to meet end users.

In a circular to all authorised dealers Tuesday, the apex bank said  the sale will be in the form of a Special Wholesale Intervention Forward not exceeding 60 days and authorised dealers are to send their request for sums not exceeding 7.5 per cent of the amount on offer.

CBN further stated that banks should not allocate funds for customers’ Letters of Credit (LCs) that have already benefited from past SMIS that are yet to mature.

“No bank shall exceed its Net Trading Position limit. Successful banks account shall be debited immediately after the release of the intervention result at their quoted rates.

Meanwhile, sequel to its promise to ease the difficulties encountered by Nigerians in obtaining funds for Foreign Exchange transactions, the Central Bank of Nigeria (CBN) on Tuesday, February 21, 2017, carried out wholesale interventions in the interbank forex market by providing a total sum of $370,810,810.79 to 23 banks to meet the visible and inviable requests of customers.

The apex bank sources disclosed that the qualified bids for the United States dollars ranged from N315 to N360, adding that seven banks received full allotments of their respective bids valued at $37,500,000 each. Other banks received allotments ranging from $46, 512.50 to $15,578,081.51.

Confirming the information, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said the Bank’s intermediation in the Forex market was the first wholesale intervention aimed at easing the pressure of access to forex by Nigerians who intend to meet obligations that fall under visible and invisible needs categories.

He further explained that the CBN offered $500,000,000.00 for sale to the banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.

In a related development, Governor Abiola Ajimobi of Oyo State has said the emerging economic indicators have shown that things have already begun to get better in the country.

The governor stated this at a special prayer session organised by Oyo State Government for President Muhammadu Buhari and the nation, held at the main bowl of Lekan Salami Sports Complex, Adamasingba, Ibadan.

Ajimobi noted that the price of crude oil that crashed in 2015 in the international market, which spelt doom for the economy, has begun to improve. A barrel of crude oil that used to sell for between $30 and $35, he stated, has now been selling above $50.

His words: “Nigeria is getting better. The price of crude oil is improving at the international oil market. Nigeria now produces two million barrels of crude oil per day and the price of oil has increased tremendously in the upwards of $50s.

“I know for sure, the way things are going, within the next three to six months, naira will begin to increase. But we Nigerians too need to work hard. Let us join hands and make this country better.”

The  $500million intervention may be part of  efforts to kickstart forex sales at the airports across the country by the banks.

But Daily Sun investigation yesterday shows that the banks are yet to mobilise to the airports in readiness for take-off of the policy.

Virtually all the banks told Daily Sun yesterday that it might take them some time to comply fully with the directive.

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