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Forex outflow through CBN rises by 18.77%

Naira slips to record-low as politics worsen FX woes

Total foreign exchange outflow through the Central Bank of Nigeria (CBN) increased by 18.77 per cent in October 2017, as a result of interbank sales, direct payments and JVC calls.

In the same period, total inflow declined by 6.61 per cent compared with the previous month and attributable to the decline in crude oil and gas receipts as well as revenues from petroleum profit tax (PPT) and royalty payments.

Godwin Emefiele, governor of CBN disclosed this while addressing the media after the Monetary Policy Committee (MPC) meeting on Tuesday. The CBN on Monday lifted the inter-bank foreign exchange market with the sum of $210 million, which helped to shore up the value of the nation’s currency on Tuesday against the US dollar.

READ ALSO: CBN enhances liquidity in the FX market with $210m

After trading on Tuesday, the naira strengthened by N0.55k to close at N359.87k compared to N360.42k traded on Monday at the investors and exporters forex window, data from the FMDQ revealed. The local currency traded stable at the inter-bank spot market, closing at the rate of N305.90k, the same level it traded on Monday. The CBN’s interventions helped boost liquidity in the Wholesale, Small and Medium Enterprises (SMEs) and Invisibles windows.

A breakdown of the intervention shows that the CBN offered the total sum of $100million to the wholesale segment, while the SMEs segment received the sum of $55 million. He said the Invisibles segment, comprising tuition fees, medical payments and Basic Travel Allowance (BTA), among others, also received an allocation of $55 million.

At the inter-bank spot market, the naira strengthened marginally by N0.05k as it was quoted at N305.90k to the dollar on Monday compared to N305.95k traded on Thursday and Friday last week. Isaac Okorafor, acting director, corporate communications department, said the releases were aimed at boosting liquidity, trade and ease of remittances for legitimate personal commitments.

READ ALSO: Inter-bank system liquidity gets a boost as CBN refunds N300bn CRR to banks

Okorafor said the Bank was quite pleased with the rate of N360/$1, noting that the continued intervention by the CBN in the inter-bank forex market had largely checked unwholesome activities of currency speculators. He, however, stressed that the CBN would not relent in its monitoring of the market to ensure that authorised dealers abide by the extant rules.

It will be recalled that the CBN in its last intervention outing, intervened in the inter-bank Foreign Exchange Market with the total sum of $195,000,000. Meanwhile, the naira maintained its steady rate against major currencies around the globe, exchanging for N360/$1 in the BDC segment of the market on Monday, November 20, 2017.