• Tuesday, March 05, 2024
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CBN’s forex market liberalisation policy brings down sales by 50.81%


The foreign exchange market liberalisation of the Central Bank of Nigeria (CBN) is beginning to block every loophole in forex market as sales yesterday dropped by 50.81 percent from $399.9 million sold on Monday to $196.7 million, yesterday.

The CBN’s forex sales yesterday dropped by $203.3 million compared to $0.02 million sold on Monday auction. The apex bank yesterday offered $400 million but sold a total of $196.7 million to 23 deposit money banks at N155.75/$ at its bi-weekly Retail Dutch Action System (RDAS) window.

Consequently, the naira yesterday strengthened against the US dollar gaining 34 kobo at the Nigerian Inter-Bank Foreign Exchange (NIFEX) market, as it closed at N164.50/$ as against N164.74/$, data from Financial Markets Dealers Quotations (FMDQ) have revealed.

Victor Ofili of research desk, Cowry Asset Management Limited, said the development may have been the impact of the new policy on foreign exchange released recently by the CBN which aimed at checking the real foreign exchange bids in relation to the real forex demand.
BusinessDay investigations show that activities at the money market yesterday was very low as banks that participated in the forex auction bided at a very low level.

The CBN had last week issued guidelines for participation in RDAS which among others directed authorised dealers desirous of participating in RDAS to fund their current account with the CBN two working days before the auction days of Monday and Wednesday.
Inter-bank rates at the money market yesterday rose by 3 percent to 88.79 percent from 83.05 percent on Monday, data from FMDQ have shown.

Consequently, while the Nigeria Inter-Bank Offered Rates for overnight call increased to 11.70 percent from 11.29 on Monday, 7 days, 30 days, 60 and 90 days tenors went down from 11.70 percent, 12.08 percent, 12.37 percent, and 12.62 percent on Monday to 12.08 percent, 12.45 percent, 12.75 percent and 13.00 percent, respectively.