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Central Bank of Nigeria (CBN) on Friday, injected a total of $355.43 million into the Retail Secondary Market Intervention Sales (SMIS).
This comes as Nigeria’s external reserves have risen to $43.62 billion as of March 8, according to data from the regulator’s website.
Figures obtained from the CBN on Friday revealed that the intervention was to meet requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.
Isaac Okorafor, acting director, corporate communications department, confirmed the figures, reiterating that the CBN interventions in the market were aimed at sustaining liquidity in the market as well as boosting production and trade.
Okorafor explained that, with increasing accretion to the country’s reserve, the bank was in a much better position to ensure liquidity in the inter-bank sector of the market and as such would continue to intervene in order to drive growth in the economy and guarantee stability in the market, particularly now that the economy had gained steam due to an upsurge in the non-oil sector.
With the rates closing at N360/$1 on Friday, March 9, 2018, Okorafor expressed confidence that the Bank’s forex intervention underscored its determination to maintain the country’s external reserves in order to safeguard the international value of the Naira.
The CBN, in its last SMIS in February 2018, injected the sum of $321.4 million in the interbank market, while also intervening in the inter-bank Foreign Exchange Market to the tune of $210,000,000, comprising of $100million for the wholesale segment and $55 million for both the Small and Medium Enterprises (SMEs) and invisibles segment.
Executive directors of the IMF have commended the recent foreign exchange measures and recent efforts to strengthen external buffers to mitigate risks from capital flow reversals. They welcomed the authorities’ commitment to unify the exchange rate and urged additional actions to remove remaining restrictions and multiple exchange rate practices.
The CBN Spot rate opened the week at N305.85/$1, appreciated 5kobo to N305.80/$1.00 on Tuesday and maintained this level till the end of the week. Similarly, the naira remained flat at the parallel market, trading at N362.00/$1 throughout the week. At the Investors’ & Exporters’ (I&E) FX Window, the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate opened the week flat at N360.14/$1 and subsequently traded within a tight band of N360.10-N360.45/$1. The NAFEX rate closed at N360.08/$1 on Friday, indicating a 6kobo appreciation Week-on-Week. Activity level in the I&E Window waned as total turnover declined by 56.8 percent to $539.9 million (On Thursday) from $1.2 billion recorded in the same period of the previous week.
“We expect the CBN to maintain its weekly interventions in the FX market, thus keeping rates at similar levels across segments,” analysts at Afrinvest Securities Limited said.
