Nigeria’s external reserves rose to $30.69 billion on July 25, from its low of $30.21 billion in June 15, according to data from the Central Bank of Nigeria (CBN). It had risen to as high as $30.98 billion in May 5, 2017.
Naira strengthened on Wednesday across foreign exchange market following sustained interventions by the CBN. After trading on Wednesday, naira gained N2.50k to close at N362.50k per dollar at the black market from N365 per dollar it traded since the weeks.
At the investors and exporters forex window, it appreciated by N0.90k or 0.24 percent as it closed at N368.60k per dollar on Wednesday, from N369.50k traded the previous day, data from the FMDQ show.
The local currency firmed marginally at the interbank spot foreign exchange market by N0.05k, closing at the rate of N305.70k/$ as against N305.75k/Q quoted on Tuesday.
Aminu Gwadabe, president, Association of Bureau De Change Operators of Nigeria (ABCON) said the exchange rates are stabilising and demand pressure declining as the CBN is mopping up the naira from the market.
He disclosed that naira is trading at N362.50k per dollar at the black market. However, in some parts of Lagos naira was seen trading around N364 and N365 per dollar.
Total foreign exchange inflows through the CBN increased by 35.41 percent in June 2017 compared with the previous month. Total outflows, on the other hand, decreased by 12.73 per cent during the same period, as a result of reduced CBN intervention in the interbank foreign exchange market, which also reduced the Treasury Single Account (TSA) (dollar) payments balances by 61.4 per cent in the period under review.
According to Godwin Emefiele, governor of the CBN, the positive net flows resulted in an improvement of gross external reserves to $30.30 billion at end-June 2017, compared with $29.81 billion at end-May 2017.
The Monetary Policy Committee (MPC) noted the emerging convergence between the bureau-de-change (BDC) and Nigeria Autonomous Foreign Exchange (NAFEX) segment rates and the stability of the average naira exchange rate at the inter-bank segment of the foreign exchange market during the review period.
The central bank has been intervening on the official market in the last few months to try to narrow the spread between rates on the official market and black market. It has sold over $5 billion since February.
Responding to the question on naira depreciation, Emefiele said the market will decide, adding that the CBN remains a player in the forex market and that the interventions at the market will continue.
The CBN held its benchmark interest rate at 14 percent on Tuesday. Emefiele said two of the eight members who attended the Monetary Policy Committee (MPC) meeting had voted to cut the headline rate.
“In consideration of the headwind confronting the domestic economy and the uncertainty in the global environment, the committee decided by a vote of six to two to retain the MPR (monetary policy rate) at 14 percent,” said Emefiele.
The CBN on Monday boosted liquidity in various segments of the inter-bank foreign exchange market with a total of $195 million.
At Monday’s Forex trading, the CBN offered the sum of $100,000,000 as wholesale interventions and allocated the sum of $50,000,000 to the Small and Medium Enterprises (SMEs) forex window. The invisibles segment comprising Business/Personal Travel Allowances, tuition and medical fees, among others, received $45,000,000.
HOPE MOSES-ASHIKE
