Plans by the Central Bank of Nigeria (CBN) to pump more dollars into the interbank foreign exchange (forex) market may shore up the value of the Naira against the greenback.
The apex bank during the weekend hinted that it would sustain its foreign exchange intervention into various segments of the market, thereby heightening expectations that the naira will appreciate in the coming days.
This became necessary following the inability of the authorised dealers to fully subscribe to various amounts offered by the bank on two consecutive times last week. Those two events alone sent jitters to currency speculators perceiving dollar glut as imminent in the market.
Speaking on the development, the spokesman of the CBN, Mr. Isaac Okorafor, confirmed the anticipated interventions in most segments of the market during the week, with effect from today.
According to him, the Bureau De Change (BDC) and the Small and Medium Scale Enterprises (SMEs) along with other major segments would also receive the adequate intervention with a view to providing liquidity in the entire foreign exchange market.
Also at the weekend, manufacturers praised the CBN over the forex management strategy adopted recently.
The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadiri, was quoted as saying that “the recent pronouncement of the CBN comes as a relief. If the intervention is sustained, there’s no doubt that we will have continued improvement in sourcing raw materials.”
The Naira appreciated marginally on all trading sessions at the interbank market, opening last week at N305.80/$1 and settling at N305.70/$1 at the end of the week.
But the Nigerian Autonomous Foreign Exchange Rate Fixing rate published on the FMDQ website depreciated marginally last week, opening at N376.54/$1 on Tuesday and closing at N377.95/$1 on Friday.
At the parallel market, the Naira/dollar exchange rate remained at N391/$1 on all trading sessions.
On Thursday, the CBN Governor, Mr. Godwin Emefiele, had met with President Muhammadu Buhari, following which he disclosed that the president was pleased with the gains recorded in the forex market, following the sustained intervention by the central bank.
He added that the prices of crude oil in the international market which had been hovering between $55 and $56 per barrel had also helped in improving revenue generation and consequently fortified the nation’s currency.