CBN continues to tighten naira liquidity to curb pressure on currency

Features & Reports

The naira is seen steady on the foreign exchange market in the coming days as the Central
Bank of Nigeria continues to inject the United States dollar into the market to improve
liquidity.

The CBN has also continued to tighten naira liquidity to curb pressure on the local
currency.

The local currency was quoted at 365 to the dollar on the black market on Thursday,
stronger than 370 per dollar last Thursday, Reuters reported.

The naira was quoted by commercial banks at 306.20/dollar on the interbank market against
305.5/dollar last week.

On the investor forex window, the naira was quoted at 365.41/dollar.

“It appears that the CBN is comfortable with the prevailing rates in the markets and we
do not envisage any change soon as the bank sustains its intervention and tighten naira
liquidity,” the President, Association of Bureau de Change Operators of Nigeria, Aminu
Gwadabe, said.

Meanwhile, Ghana’s cedi is seen steady next week on stable interbank forex liquidity
inflows, helped by regular central bank’s dollar sales, an analyst said.

The local unit was trading at 4.3900 per dollar by mid-morning on Thursday, almost
unchanged from 4.3902 a week ago.

“The cedi has remained firm this week largely on improved liquidity flows and we don’t
expect much departure from this narrative in the coming week,” a commercial bank trader
said.

The Tanzanian shilling is expected to remain firm in the days ahead, buoyed by a slowdown
in demand for the US dollars, while Kenya’s shilling is expected to weaken due to demand
from oil and merchandise importers buying dollars.

The Ugandan shilling is forecast to trade in range over the next one week as investors
show little appetite for the greenback at levels above 3,600, which they consider to be
on the higher side.

–Punch