Naira appreciates as CBN injects $411.8m into FX market

By Odunewu Segun

Following the intervention of the Central Bank of Nigeria in the foreign exchange market by selling $411.8 million dollars for visible and invisible foreign exchange transactions, the naira appreciated to N516 per dollar from N520 earlier recorded on Monday.

National Daily gathered that the apex bank carried out wholesale interventions in the interbank forex market by providing a total sum of $370.8 million futures transactions to 23 banks to meet the visible and invisible requests of customers. It also provided $46 million on spot transactions.

It was also gathered that seven banks received full allotments of their respective bids valued at $37.5 million each while other banks received allotments ranging from $46,512.50 to $15,578,081.51.

A breakdown of the forwards indicates that $216,465,671.02 is for 30 days, while $154,345,139.77 is for 60 days. The apex bank also made spot sales of $1.5 million to four banks, totalling $6 million. It also offered $41 million for sales of which $35 million was taken up for the payment of school fees, medical bills and personal and business travel allowances.

Confirming the information, Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said the bank’s intermediation in the forex market was the first wholesale intervention aimed at easing the pressure of access to forex by Nigerians who intend to meet obligations that fall under visible and invisible needs categories.

He further explained that the CBN offered $500 million for sale to the banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.

While expressing optimism that the wholesale intervention of the CBN would substantially ease the foreign exchange pressure on visible and invisible needs of customers, Okorafor assured that the bank would continue to make interventions based on qualified bids from the banks on the requests of their customers.

Under the new policy, the CBN said it would sell direct additional dollars to banks to meet the needs of Nigerians for Personal Travel Allowance, PTA, and Business Travel Allowance, BTA, medical needs and school fees at exchange rate not exceeding 20 per cent above the interbank market rate.