On Monday, the Central Bank of Nigeria (CBN) injected over $205 million into the foreign exchange market.
A breakdown of the intervention revealed that:
- The sum of $100 million was released for the wholesale segment of the market for both spots and forwards; Basic Travel Allowance (BTA), Personal Travel Allowance (PTA) and other invisibles got $50 million while the Small and Medium Scale Enterprises (SME) segment got $55 million
- The naira closed at N381 to the dollar on the parallel market yesterday, lower than the N380 to the dollar it closed last Friday.
- The Investors and Exporters segment of the market had so far recorded a trade volume in the sum of $1.1 billion from both the CBN and autonomous windows which according to him, was an indication of the appreciable level of confidence in the foreign exchange management by foreign investors and autonomous suppliers of foreign exchange to the market.
Furthermore, the CBN recently restated its resolve to converge the multiplicity of exchange rates in the forex market.
A Deputy Governor of the CBN, Dr. Joseph Nnanna, also told Bloomberg at the weekend that the aim of the new forex window for investors was to “achieve the convergence” between the different exchange rates.
“If we achieve convergence, I don’t think the window will be necessary anymore because you’ll have one exchange rate for the economy,” Nnanna said.
One advantage of the foreign exchange shortages is that they have forced Nigerians to buy more local products, including food such as rice, Nnanna said.
“The craze for imported goods has declined. Our consumption pattern is changing. We are producing what we used to import before.The central bank will boost lending to agricultural businesses through its intervention funds,” he said.
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