Three forex windows benefit from CBN intervention targeting rates stability

Three windows of Nigeria’s foreign exchange market benefited from a Central Bank of Nigeria intervention Tuesday, that was essentially aimed at maintaining exchange rates stability, business a.m. has learnt.

The intervention value was put at $210 million.

This intervention is the third time within a week that the apex bank would be stepping in to cool nerves in the country’s forex market windows, suggesting pressure build-up on the demand side, as the political climate begins to settle itself ahead of next year’s elections, say analysts who spoke to business a.m. on the latest intervention.

In a statement it issued Tuesday, the CBN said it had intervened in the wholesale window to the tune of $100 million, Small and Medium Enterprises (SME) segment to the tune of $55 million and the invisibles segment also to the tune of $55 million, bringing the total intervention to $210 million.

Last Tuesday, the bank intervened similarly in the same windows of the market to the tune of $210 million.

Isaac Okorafor, CBN’s acting director, corporate communications department said the interventions, like the ones done previously, were in line with the apex bank’s commitment to sustain the high level of stability in the forex market and continually ease access to the currency by those requiring it for genuine activities.

Okorafor said the CBN was prepared to inject funds into the market, whenever and wherever necessary, in order to maintain market stability as well as sustain the financial system.

The CBN, he said, was drawing confidence from recent gains in the foreign exchange sector, which has seen the country’s reserves rise near the $50 billion mark.

The country’s reserves continued to enjoy accretion, Okorafor said, adding that the status of the present reserve at the bank meant that the CBN was capable of sustaining foreign exchange liquidity in the system.

The intervention followed a naira/dollar exchange rate of N361/$1 at the bureau de change (BDC) window of the market.

Last Friday, April 20, 2018, the CBN injected $396.18 million to intervene in the Retail Secondary Market Intervention Sales (SMIS).