… as CBN set to inject more dollars
Deposit money banks recorded a total turnover of $58.54 million with an average daily turnover of $11.71 million at the spot foreign exchange market last week.
This represented a 40.19 percent decline compared with $97.89 million with an average daily turnover of $19.58 million reported the previous week, according to the FMDQ.
Also in the same week-ended March 24, trading activity in the spot forex market between the banks and their clients stood at $417.08 million with an average daily turnover of $83.42 million, representing a 1.13 percent decrease from the $421.87 million with an average daily turnover of $84.37 million recorded in the previous week.
Within the week, the exchange rate in the parallel market firmed up by N3.00 per dollar to close at N392.00 per dollar, indicating a gain of less than 1 percent when compared with N395.00 per dollar reported at the end of the previous week-ending March 24.
In the interbank market, the official exchange rate gained marginally by N0.65 to close at N306.35 per dollar, indicating a 0.21 percent increase when compared with N307.00 per dollar reported at the end of the previous week-ending March 24.
Consequently, the spread between the interbank and parallel market exchange rates fell by N2.35 to N85.65 per dollar, representing a 2.67 percent decrease from the spread of N88 to the dollar recorded the previous week-ending March 24.
Still in the OTC foreign exchange Futures market, contracts worth $54.58 million traded in about 12 deals for the week-ended March 24, compared with the previous week’s total of $186.22 million traded in about 34 deals.
During the week the Central Bank of Nigeria (CBN) continued its supply of US dollars to the market, selling a total of $285 million through several interventions conducted. The apex bank kept its marginal rate for the Secondary Market Intervention Sales (SMIS) – Wholesale Forwards intervention at $/N320 during the week.
However, there are strong indications that the Central Bank of Nigeria (CBN) is again set to further inject more foreign exchange market with a view to ensuring liquidity in the interbank market and leading to a further of the dollar early this week. This is in addition to the further increase in the sale of dollars to the Bureaux de change operators from $8,000 to $10,0000 per week.
The latest information about the action of the apex bank, which became clear over the weekend, seems to have calmed the earlier apprehension over the ability of the CBN to sustain the intervention.
Confirming the intention of the apex bank to inject additional foreign exchange into the system to newsmen in Abuja over the weekend, the Acting Director, Corporate Communications of the CBN, Isaac Okorafor, said that the CBN was determined to sustain the provision of liquidity in the foreign exchange market in order to enhance accessibility and affordability for genuine end users.
Meanwhile, the CBN over the weekend also warned commercial banks and other dealers to desist from sabotaging the efforts aimed at making life easier for foreign exchange end users.
According to Okorafor, the CBN has received complaints from customers over frustrations which they were meant to go through in getting foreign exchange for invisible items like tuition fee, medicals, personal and basic travel allowance.
The bank urged the general public to report to it any bank that fails meet customers needs after due documentation. It once again reiterated its determination to deal with any official or institution found to be sabotaging the operations of foreign exchange market in whatever guise.
The CBN on Tuesday, March 28, 2017 reviewed downwards the rates at which it sells US$ to Bureau De Change operators (BDCs) from ₦381.00 previously to ₦350.00, directing all BDCs to sell to end-users at a maximum of N360.00. The CBN by the same notice also increased the frequency and supply of FX to BDCs to $10,000.00 per BDC, twice a week, through bi-weekly auctions.
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