Nigeria’s currency on Tuesday strengthened across foreign exchange markets due to moderation in demand for dollars by the end users.
This comes after the Central Bank of Nigeria (CBN) clearly stated on Tuesday that Nigeria has not changed from its foreign exchange management policy, saying Nigeria still remains on a managed float.
According to Godwin Emefiele, governor of the CBN, this means that the Central Bank being the institution that has the core mandate of foreign exchange management, would run the market, see to how that market operates, depend on its readings, and would come from time to time to intervene in the foreign exchange market.
“Since January the CBN has not intervened in the I&E window, the market has always operated within a band of around N409 to the dollar, at some point, it attained N412/$ and N413/$ and began to move and that it is how it supposed to move. CBN job is the moderate the market in line with where we think exchange rate should be,” Emefiele said.
Dollar has been trading at N410 at the Investors and Exporters (I&E) forex window or the Nigerian Autonomous Foreign Exchange (NAFEX), since the beginning of the year.
After trading on Tuesday, naira appreciated marginally by 0.08 percent to N409.80k compared to N410.13k closed on Monday at the I&E window, data from the FMDQ show.
Currency traders who participated in the trading on Tuesday maintained bids at between N393.00k and N412.00k/$.
At the black market and Bureau De Change (BDC) segment of the foreign exchange market, Naira remained unchanged at N485 and N486 per dollar, respectively.
The daily foreign exchange market turnover rose by 27.93 percent to $33.11 million on Tuesday from $25.88 million recorded on Monday.
After the two-day Monetary Policy Committee (MPC) meeting on Tuesday, the CBN retained the Monetary Policy Rate (MPR) at 11.50 percent, with the asymmetric corridor around the MPR at +100/-700 bps. Also, the Cash Reserve Ratio (CRR) and Liquidity ratio were left unchanged at 27.5 percent and 30 percent, respectively.
