Naira to gain more as CBN injects $418m

The Naira is set to be given further lift in the forex market with CBN’s injection of another $418 million into various segments of the inter-bank Foreign Exchange market on Tuesday, June 13, 2017. This is coming on the heels of a cumulative $2.2bn boost in the transactions at the Investors’ & Exporters’ (I&E) segment of the market.

Figures obtained from the CBN indicate that the retail segment of the market received the highest intervention with a total of $226 million, followed by the wholesale window that received an allocation of $100million. The Small and Medium Enterprises (SMEs) window received a boost of $50 million while the invisibles segment, comprising Business/Personal Travel Allowances, school tuition, medicals, etc. was allocated the sum of $42 million to meet the demands of customers.

Confirming the figures, the Bank’s spokesman, Isaac Okorafor, also disclosed that the volume of currency trading in the Investors’ & Exporters’ (I&E) FX Window had cumulatively hit heights of $2.2 billion since the CBN introduced it on Friday, April 21, 2017 to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

The spokesman expressed confidence that the interventions will continue to guarantee stability in the market and ensure availability to individuals and business concerns.
It will be recalled that the CBN only on Monday, June 12, 2017, injected the sum of $413.5 million into the inter-bank market in its unrelenting bid to guarantee liquidity in the market as well as shore up the international value of the naira.

A breakdown of Monday’s figures shows that the apex Bank offered the sum of $100 million to authorized dealers in the wholesale window, while the Small and Medium Enterprises (SMEs) window was allocated a total of $28 million. The invisibles segment was allocated the sum of $25.5 million to meet the needs of customers in that sector.
Analysts see the increase in the volume of transactions in the Investors’ & Exporters’ (I&E) segment as a positive sign of the return of confidence in the financial markets as clearly demonstrated by the activities in the stock market.

According to them, the sentiments of investors had strengthened since the CBN established the I&E FX window in April, which they agreed had ensured greater flexibility in forex rate determination. They, however, urged the CBN to continue its march towards the convergence of rates.
Meanwhile, the naira remained stable with a high possibility of further strengthening in the FOREX market on Tuesday, June 13, 2017, exchanging at an average of N363/$1 in the BDC segment of the market.