The nation’s currency is seen trading strong in the coming months following the continued interventions of the Central Bank of Nigeria (CBN) in the foreign exchange market.
After its maiden Monetary Policy Committee (MPC) meeting for 2019, the CBN on Friday, January 25, 2019, injected the sum of $289.76 million into the retail Secondary Market Intervention Sales (SMIS) and CNY38.70 million in the spot and short-tenored forwards segment of the inter-bank foreign market.
Naira last week appreciated at the Investors and Exporters Forex Window (I&E FXW) by 0.09 percent to close at N362.46 per U. S dollar. The NGN/USD rate at the Interbank foreign exchange market remained unchanged at N357.97/USD.
Isaac Okorafor, director, corporate communications department at the CBN, confirmed the figures, noting that the dollar-denominated interventions were for transactions in the agricultural and raw materials sectors.
On the spot and short-tenored sales in Chinese Yuan, he said they were similarly for payment of Renminbi denominated Letters of Credit for agriculture and raw materials based on bids received from authorized dealers.
While reiterating the Bank’s support to the inter-bank foreign exchange market, he disclosed that the Bank’s management was pleased with the level of stability at both the Bureau-de-Change (BDC) and the Investors’ and Exporters’ (I&E) window of the foreign exchange market.
According to him, the CBN management was also satisfied with the current implementation of the Bilateral Currency Swap Agreement (BCSA) with the Peoples Bank of China (PBoC), coupled with a recent inflow of about US$2.8 billion Euro bond.
The MPC noted at the meeting the marginal increase in the external reserves, from US$42.54 billion at end-December, 2018 to US$43.28 billion as at January 21, 2019, noting that these improvements would further strengthen investor confidence in the Nigerian economy.
Okorafor expressed confidence that the foreign exchange market in Nigeria will continue to enjoy stability in the coming months and beyond, given the marginal increase in the country’s external reserves.
It will be recalled that the CBN had on Tuesday, January 17, 2019 intervened in the wholesale, Small and Medium Enterprises (SMEs) and invisibles windows of the inter-bank foreign exchange market to the tune of the sum of $210 million.
Meanwhile, $1 exchanged for N361 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY1 exchanged for N53.
“In the new week, we expect stability in the Naira/USD rate in most market segments, especially at the BDC Segment, as CBN sustains its special interventions”, analysts at Cowry Asset Management Limited said.
HOPE MOSES-ASHIKE
