Dealers Pick $85.69m Out of $100m Offered by CBN

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  • Dealers Pick $85.69m Out of $100m Offered by CBN

The Central Bank of Nigeria (CBN) said on Friday that authorised dealers were only able to pick $85.69 million out of the $100 million it offered at Thursday’s FOREX wholesale auction in the inter-bank market.

Confirming the development last night, the Acting Director of Corporate Communications at the CBN, Isaac Okorafor, said the inability of authorised dealers to pick up the whole amount offered by the apex bank was a pointer that there was enough foreign exchange to meet legitimate forex demands within the system.

While stressing that the CBN had the capacity to sustain the current levels of liquidity in the forex market, Okorafor said the Bank was “committed and was indeed working to achieve convergence in the forex rates between the Interbank and the Bureau de Change (BDC) segment.”

Meanwhile, reports gathered in Abuja and Lagos in the course of the week indicate that the Naira sustained its momentum against major currencies, especially the United States dollar, exchanging at an average of N380 to $1.

The CBN on Thursday offered $100 million to authorised dealers to meet the requests of wholesale customers at the forex auction in the interbank wholesale window.

The CBN spokesman had stated that no intervention was made in the retail window in Thursday’s auction, but stated that the Bank continued its weekly sale of forex to the Bureau de Change (BDC) segment to meet the needs of low-end users.

He said the CBN had observed that quite a good number of dealers were adhering to the forex guidelines. Nevertheless, he said the CBN will continue to monitor the activities of authorised dealers to ensure that no outfit or individual circumvents the laid down forex rules.

He urged all concerned to put the Nigerian economy first, reiterating that the CBN was determined to guarantee the international value of the naira.

In line with assurances by CBN Governor, Mr. Godwin Emefiele that the CBN would continue to intervene in the foreign exchange market, the Bank on Wednesday auctioned the sum of $185.86 million through retail Secondary Market Intervention Sales (SMIS).

The Bank also on Wednesday settled the 10th Over-the-Counter (OTC) foreign exchange (FX) Futures Contract valued at $965.29 million which matured on the FMDQ OTC Securities Exchange. The FMDQ revealed this on its website.

Okorafor while confirming the Wednesday auction sale, disclosed that out of the auctioned amount, only $3.14million was sold as spots, while the sum of $182.72million was sold as forwards.

He further explained that the overall picture of the inter-bank forex market was that of optimism, going by the level of access now being enjoyed by different categories of customers in both the wholesale and retail segments of the market.

The CBN Governor had given a firm assurance of the imminent end of the current recession in 2017, at the end of his meeting with intervention in the forex market.

Emefiele said: “Our reserves stand at above $31bn and that provides us enough of firepower or ammunition to be able to defend the currency, and we will do so with all intensity to ensure that foreign exchange is procured by everybody.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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