Naira gains as CBN injects $367.1m into forex market

The nation’s currency which reversed gains made last week, regained strength on Monday, to close at N455 to the dollar at the black market after the Central Bank of Nigeria (CBN) injected a total of $367.1 million into the foreign exchange market to meet the forwards request of customers.
A breakdown of the forwards shows that the sum of $144 million was for 45 days forwards, while $223 million was for 60 days.
The CBN Acting Director in charge of Corporate Communications, Isaac Okorafor, confirmed the release, adding that the move was in line with the bank’s determination to ease the foreign exchange pressure on various sectors, through forward sales under the new flexible foreign exchange regime to keep the market liquidity.
The injection resulted in the naira appreciating against the U S$, to close at N455 US$ at the black market. It gained N19 or 4.01 percent compared to N474 traded on Friday.
The dollar was traded at N465 in the early hours of Monday and later strengthened at the close of the trading day. The CBN had on Friday, announced that it would inject additional $350 million in the interbank forex market, through its special wholesale intervention forward sales.
BusinessDay investigations across Lagos markets operated by black market traders, showed that the dollar was quoted at N455 at the Lagos International Airport. In the Festac area of the state, the dollar closed at N450, while it traded at N460 per dollar in Apapa.
Aminu Gwadabe, acting president, Association of Bureau De Change Operators of Nigeria (ABCON) said the naira regained strength from N470 on Friday to N460  at the close of business on Monday.
Gwadabe said this was possible as a result of the consistent CBN intervention and warnings to the operators on non-compliance. Gwadabe told BusinessDay that BDCs are only accessing the proceeds of International Money Transfer Operators (IMTOs) for $8,000 each at the rate of N381 to the US$ “The banks are not directed to sell dollars to the BDCs”, he said.
In February, the Central Bank effectively devalued the naira for private individuals, offering to sell them the currency at around half the premium charged at the black market, in a bid to narrow the spread on the unofficial market.
The CBN on Sunday directed deposit money banks to open teller points for retail forex transactions, including buying and selling, in all locations, in order to ensure access to forex by their customers and other users, without hindrance.
Also, banks are mandated to process and meet demand for school fees and medical bills within 48 hours of such application. The CBN, in a circular, mandated banks to process and meet the demand for travel allowances (PTA/BTA) by end-users within 24 hours of such applications, as long as the end users meet basic requirements.

By HOPE MOSES-ASHIKE