CBN Sells $210 Million to Deepen Forex Activity

• CBN Sells $210 Million to Deepen Forex Activity

The Central Bank of Nigeria on Tuesday sold US$210 million to deepen foreign exchange activity and support economic productivity.

A breakdown of the amount showed $100 million was sold to the wholesale market, while $55 million was injected into the Small and Medium Enterprises forex window. The remaining $55 million was sold to customers requiring forex for business, travel allowances, tuition and medical fees.

Mr. Isaac Okorafor, the Acting Director of Corporate Communications, CBN, said the apex bank was pleased with the stability of the local currency against the US dollar and other major currencies of the world.

The central bank pledged to continue intervention in line with its resolve to ensure sufficient liquidity across all forex windows.

According to Okorafor, “the new forex policy had resulted in lower import bills and growing foreign reserves.”

The Nigerian foreign reserves rose to a record high of $47.79 billion on July 5 before decreasing to $46.86 billion on August 8.

Experts attributed the success to rising global oil prices and buoyant global economics. However, some experts warn that trade tensions and growing uncertainty in emerging markets due to rising interest rates in developed economies and Turkey’s economic break down may hurt capital inflows and disrupt foreign reserves strategy.

The central bank left interest rate unchanged during the last monetary policy meeting in Abuja to further encourage capital inflow and curb inflation rate.

“The committee strongly considered tightening monetary policy to further curtail the threat of a rise in inflation and sustain capital inflow in the face of sustained monetary policy normalization in the US,” said CBN governor, Mr. Godwin Emefiele.