Naira rises as CBN pumps $180m into forex market

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By Emma Ujah, Abuja Bureau Chief & Babajide Komolafe
ABUJA—The Central Bank of Nigeria (CBN) injected another $180 million into the foreign exchange market, prompting the Naira to further appreciate by N10 against the dollar in the parallel market.

Naira

Details of the foreign exchange supply showed that the apex bank injected $100m into the wholesale forwards segment of the market and sold an additional $80m into the banks specifically for the settlement of dollar demand for school fees, medicals and Personal Travel Allowance (PTA), among others.
Consequently, the CBN has injected about $541 million into the foreign exchange market since last week, when it unveiled new measures to boost dollar supplies in order to halt Naira depreciation in the parallel market.

In a statement announcing the additional dollar supplies, Acting Director, Corporate Communication Department, CBN, Mr. Isaac Okorafor, said: “The CBN’s commitment to providing enough forex for legitimate business remains unshaken, reiterating that it would do “everything possible” to ensure the steady supply of forex to the market.

“It will be recalled that efforts by the CBN in making available large amounts of forex to the market had 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 had warned market players and keepers of dollars to make hay and sell their holdings in order to avoid heavy losses.”

Meanwhile the Naira, yesterday, appreciated by N10 against the dollars as the parallel market exchange rate dropped further to N450 per dollar. Parallel market sources said the market rate dropped from N460 per dollar at the close of business Friday, last week, to between N450 and N455 per dollar depending on the location and volume of transaction.

A BDC Chief executive, who spoke on condition of anonymity, told Vanguard that there was expectation of further appreciation of the Naira, at least, in the short term, and this is prompting those who have the dollars to release it for sales.

Cumulatively, the Naira has appreciated by N70 against the dollar in the parallel market since last week Monday, when the CBN unveiled its new foreign exchange measures. Prior to the measures, the Naira depreciated in the parallel market from N490 per dollar as at the end of January to N520 per dollar Friday, February 17, 2017.

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