CBN hopeful of rates convergence, boosts forex liquidity with $388.66m

The retail segment of the interbank forex market received a boost on Friday, as the Central Bank of Nigeria intervened with the sum of $388.66m sold to authorised dealers in that sector of the market.

Friday’s figures were the results of the bids submitted by dealers since Tuesday.

Confirming the numbers, the Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, disclosed that the sum of $87.885 was for spot sales, while $300.8m was sold as forwards.

Okorafor explained that the forwards were sold into three tenors of 30, 45 and 60 days. According to him, the bank sold $100.95m as 30-day forwards; $110.48m as 45-day forwards and $99.37m as 60-day forwards.

While also confirming that the bank continued with its intervention in the Bureau De Change segment of the market to meet the needs of low-end users, the spokesman said the bank remained resolute in ensuring that it supplied enough forex to genuine customers and in the process sustain liquidity in the market.

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With this development, he expressed hope that the CBN would inch even much closer to its objective of convergence of the rates in the interbank and BDC segments.

The CBN, in the course of the week, had intervened in the wholesale and invisibles segments of the market with amounts valued at over $346m to ease access to foreign exchange by different categories of customers.

The bank’s actions drove lenders to borrow from its discount window to cover their position after overnight rates hit 53 percent at Friday’s open before falling back to 19 percent.

The naira was quoted weaker on Friday at the investor trading window, at 382.69 per dollar, data from market regulator FMDQ OTC Securities Exchange showed. The official market rate, at 305.70, and the black market rate, at 391, were little changed.