Again, Nigeria’s central bank keeps forex market liquid with $396.18m intervention

Nigeria’s central bank moved, for the second time in a week on Friday, to keep the country’s foreign exchange market liquid when it intervened in the Retail Secondary Market Intervention Sales (SMIS) segment with $396.18 million.

On Wednesday the central bank intervened in the inter-bank segment of the market with $210 million to help ease demand pressure and stabilise the market and rate.

The Central Bank said in a statement that the released sum is meant to meet obligations in the agricultural, airlines, petroleum products and raw materials and machinery sectors of the economy.

Isaac Okorafor, acting director ot the Corporate Communications Department, said that the interventions by the apex bank in both the retail and wholesale sectors of the forex market were targeted primarily at ensuring liquidity in the market as well as encouraging production and trade, particularly now that the focus was on the promotion of local content.

The bank’s ability to make these interventions have been boosted by Nigeria’s rising foreign reserves levels now close to $50 million with Okorafor stating that the CBN was even more determined to sustain the gains recorded through the various policy options the it took in the course of stemming the depletion of the external reserves and steering Nigeria out of recession.

The CBN was committed to supporting efforts aimed growing the economy and further diversifying it away from oil, he said, adding that this was beyond just ensuring that the inter-bank sector of the forex market was liquid.

Okorafor assured that the market will remain stable despite rates closing at N362 to the dollar on Friday, April 20, 2018, and that the CBN would ensure it maintains the country’s external reserves in order to safeguard the international value of the domestic currency, the naira.

In its last SMIS on March 23, 2018, the CBN intervened with the sum of $339.89 million, while also intervening in the inter-bank forex market with $210 million made up of $100 million for the wholesale segment and $55 million for both the Small and Medium Enterprises (SMEs) and invisibles segment on Wednesday, April 18, 2018.