Central Bank Upbeat about Further Naira Appreciation

 

The Central Bank of Nigeria (CBN) has expressed optimism that the United States dollar would crash further this week as it plan to carry out further interventions in the interbank market.

Also, following its intervention through wholesale forex auction last Thursday, the CBN at the weekend revealed that of the $100million earlier offered at the interbank market to meet customers’ demands, authorised dealers were only able to pick $81.347million after an initial bid for $91million.

Commenting on the offer, the acting Director of Corporate Communications at the CBN, Isaac Okorafor, attributed the inability of authorised dealers to pick up the entire offer of the CBN to increasing dollar supply and sense of apprehension among dealers who anticipate a further crash in the rate of the dollar.

Okorafor reiterated the determination of the bank to sustain its current interventions in the market.

He said: “Those who doubt the capacity of the Bank to sustain the intervention in the forex market are beginning to have a change of mind.”

He also confirmed the plan to inject more forex into the market.

According to him, the move underscored the commitment of the CBN to sustain the tempo of liquidity in the interbank market for the sake of different categories of genuine end-users.

He therefore urged authentic prospective customers to freely approach their respective banks with relevant requirements to apply for the purchase of foreign exchange, assuring that the banks had adequate supplies to meet genuine needs.

Okorafor also warned forex dealers against engaging in acts capable of disrupting the current smooth operations of the forex market, stressing that the CBN would penalise any organisation found guilty of bending the rules.

Findings showed that the US dollar traded between N390-N395 to the dollar at some parallel market points in Lagos at the weekend.

CBN, in keeping with its determination to increase liquidity in has so far flooded the forex market with an estimated US$2 billion in cash and currency forwards since February. This amount does not include its daily intervention of $1.5 million on the interbank market. Owing to this, the naira exchange rate, which depreciated by 76 per cent on the parallel market in 2016 due to scarcity of the greenback, has appreciated by about 27 per cent in the last one month since the new policy was announced.

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