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Naira gains not stopping CBN from sustaining intervention

Features & Reports

Naira’s continued gains against the dollar will not deter the Central Bank of Nigeria (CBN) from sustaining its intervention in the interbank market, the apex bank said yesterday.

The CBN has since February been pumping in dollars in all segments of the interbank market to ensure liquidity and availability of forex. More than $5 billion has been injected into the market.

The naira has gained substantial ground against the United States dollar, selling at N363/$1 compared to the previous rate of N378/$1, the apex bank said.

According to market sources, the CBN is determined to ensure a convergence between the interbank and Bureau de Change (BDC) rates soon, hence the move to continue its intervention in the interbank market.

The regulator had last Tuesday intervened in the inter-bank market to the tune of $482.6 million with the Retail SMIS allocated the sum of $285,779,350, while the $100 million was offered in the Wholesale SMIS auction window.

The Small and Medium Enterprises (SMEs) window got an allocation of $52 million, while the invisibles segment, comprising Basic Travel Allowance (BTA), Personal Travel Allowance, medicals and tuition fees, among others, was allocated the sum of $45 million.

Speaking at the weekend, CBN spokesman Isaac Okorafor said there were indeed plans by the CBN to make necessary interventions in the forex market, in line with its earlier resolve to achieve forex rates convergence and liquidity in the market.

On how the Bank hoped to sustain its interventions, Okorafor said the CBN had enough forex to meet the requirements of all customers, who had genuine need for the dollar. He also expressed optimism that the current policy of the bank and the cooperation of all stakeholders would check the unwholesome activities of speculators.

Okorafor reiterated the bank’s commitment to ensure that there is enough supply of forex to genuine customers to achieve the goal of forex rates convergence.

Indications at the weekend suggested that the rates between the interbank and BDC may soon converge, with the difference now down to a few naira. Observers, while commending the bold move of the CBN, urged the bank to remain committed to its goal for the benefit of the Nigerian economy.