By Dipo Olowookere
A total of $7.136 billion has been released by the Central Bank of Nigeria (CBN) to the Bureaux De Change (BDC) and the interbank segments of the foreign exchange market.
This amount was disbursed by the apex bank to meet the needs of customers who require forex to pay school fees, medicals and BTA.
Also, it was released to held SMEs owners who need forex to imports some materials from foreign countries.
According to National Daily, the CBN disbursed the amount between February 21 and June 21, 2017, to ease the pressure in the forex market and ensure exchange rate stability and eliminate currency speculators.
Owing to this measure, the Naira, which fell to a historic low of N525/$ on the parallel market four months ago, has been trading around N360/$ since April.
A breakdown of the dollar sales showed that $680 million was pumped into the market in February; $1.542 billion was sold in March; $1.616 billion in April; $2.102 billion in May; and $1.196 billion in June.
The $2.102 billion sold by the Bank in May was the highest in four months. In May, the central bank sold dollars in eight different sessions.
While the country’s reserves has been on the decline since the intervention started, the CBN Governor, Mr Godwin Emefiele, explained that the initiative was to ensure that Nigerians that have legitimate demand for FX were not excluded from the market.
On April 21, the central bank also bolstered confidence in the market with the opening of an Investors and Exporters’ (I&E) window, which has continued to excite both local and foreign investors as well as the various international rating agencies, and seen to the convergence of the rates on both segments of the market.
The Naira sold at N368 to the Dollar on the parallel market on Friday, while in the I & E window it went for N367.83 to the Dollar.
“The convergence of rates, at least for a segment of the market, demonstrates the success of the central bank’s interventions,” Africa’s Chief Economist at Standard Chartered Bank, Razia Khan said.
Khan said by addressing the demand for dollars, the central bank was able to reduce speculative attacks on the local currency and its precipitous decline.
