Business Hilights
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CBN fast tracking naira appreciation, injects fresh $180m into forex

The naira continued to regain strength and appreciate in value in the parallel market on Tuesday as it was sold for N425 to a dollar.

The meaning of this is that currency speculators are not having a negative fight for their money as the Central Bank of Nigeria (CBN) earlier in the week jerked up liquidity in the foreign exchange market by additional $180m for settlement of various transactions made by Nigeria.

Already, investigations by Business Hilights conducted round some mega parallel markets in Lagos showed lull in the activities of speculators’ as they are now apprehensive because of their inability to decode the next line of action of the regulator, the CBN in tracking naira back to life.

In a statement, the Acting Director, Corporate Communications Department at CBN, Mr. Isaac Okoroafor said while the sum of $100m was released into the wholesale forwards segment of the market, additional $80m was provided to banks specifically for the settlement of dollar demands for school fees, medicals and Personal Travel Allowance, among others.

“In keeping with its determination to increase liquidity in the foreign exchange market, the Central Bank of Nigeria on Monday released another $100m into the wholesale forwards segment of the market and pumped an additional $80m into the banks specifically for the settlement of dollar demands for school fees, medicals and Personal Travel Allowance, among others.

According to him, CBN’s commitment to providing enough forex for legitimate businesses remained unshaken, noting that the bank would do everything possible to ensure the steady supply of forex to the market.

Though this will be the third time the apex bank is intervening in the forex market within a week, a development that has forced dollar to depreciate against naira in a drastic speed recorded only about 12 years ago.

Analysts say during the first intervention last week, the CBN offered $500m for sale to banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.

During the second intervention, a total of $221.3m was released by the apex bank to 16 banks.

In the voice of Okoroafor, the CBN would continue to make interventions, based on qualified bids from banks on the requests of their customers.

While stressing that the apex bank was more than ever ready to support the inter-bank market, by ensuring liquidity and transparency to guarantee efficiency in the forex market, he called on all market participants to assist in ensuring that the new measures put in place by the CBN guaranteed the stability of the financial market.