Forex: CBN Opens Week with $195m Ahead of MPC Decisions

Nigerian Central Bank, Abuja, Nigeria.

The Central Bank of Nigeria (CBN), yesterday, boosted the foreign exchange market by offering a total of $195m in three segments of the market with wholesale Secondary Market Intervention Sales (SMIS), of the inter-bank Foreign Exchange market getting $100 million the Small and Medium Enterprises (SMEs) and invisible segments getting $50 million and $45million respectively.

This week’s intervention is significant, coming in the midst of the Monetary Policy Committee Meeting taking place on Monday, September 25 and Tuesday, September 26, 2017.

It will be recalled that yesterday’s sale follows the major intervention, last week, to the tune of $545 million, as the retail Secondary Market Intervention Sales (SMIS) received the largest intervention of $285 million. Other segments include the $100 million offered for wholesale SMIS, $90 million for Small and Medium Enterprises (SMEs) window and $70 million for invisibles such as Basic Travel Allowances, tuition fees and medical payments.

The CBN Acting Director, Corporate Communications, Isaac Okorafor said that the bank’s intervention was to maintain its commitment to sustain liquidity in the market to meet genuine requests as well as deepen flexibility in the foreign exchange market.

He said the CBN would continue to work on achieving the objective of convergence of rates in the various segments of the market, and would continue to strive that the forex market guarantees transparency in the sale of foreign exchange.

Okorafor recalled that only last week, the CBN threatened to sanction any Deposit Money Bank (DMB) in breach of its earlier directive of March 3, 2017, which instructed them to, among other things, open teller points for retail forex transactions and to have electronic display boards in all their branches, showing rates of all trading currencies.

He stated that the bank’s firm stance goes to reiterate its commitment to ensure liquidity in the foreign exchange market, where all genuine requests will be met in line with extant forex guidelines, noting that it would foster more transparency and to make the public become aware that these facilities exist.