FOREX: Naira Further Strengthens to Sell at N435/$ as CBN Injects Fresh $180 Million

The Central Bank of Nigeria (CBN) on Monday offered a total of $180 million to meet bids for wholesale auction and requests for invisible such as medicals, school fees and personal travel allowances valued at $80 million through the inter-bank window.

The development saw the Naira appreciate to N435 per dollar due to declining demand for dollars.

“The appreciation is due to both increase in dollar supply and reduction in demand. First is the increase in number of BDCs accessing CBN dollar sales, the second is the sustained dollar sales by CBN to banks for invisible items and the third is the fact that most of the demand in the market before the CBN began its intervention, were driven by fear of further depreciation of the naira, added to this were frivolous demand or demand for speculation. Demand for dollars for these purposes has dropped to near zero. If the CBN continues its intervention, demand will continue to drop and the naira should further appreciate”, Vanguard quoted President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe as saying.

Meanwhile, the Acting Director of CBN Corporate Communications Department, Isaac Okorafor, who confirmed the forex injection, said the wholesale requests would be settled on Tuesday, March 21, 2017.

With the development, it is expected that the Naira will further strengthen in the Foreign Exchange (FX) market in the days to come.

Mr Okorafor stated that the financial regulator has so far met all the legitimate demands from genuine customers.

He reiterated that the apex bank would ensure sustainable FX liquidity and transparency in the process to enable as many customers as possible get access to the foreign exchange they genuinely demanded.

The CBN official further advised eligible individuals with genuine foreign currency needs to freely approach their banks and authorised dealers with their request.

He stressed that the CBN had made adequate provisions of foreign currency for all such legitimate purposes, asking the customers to approach the financial regulator with their complaints should they be unfairly denied access.