- CBN Targets Exchange Rate Stability, Naira Now 380/Dollar
The Central Bank of Nigeria on Sunday said it would continue to introduce measures to stabilise the foreign exchange market.
It also said that various forex initiatives it had introduced in recent weeks were beginning to yield results with stability recorded in the naira exchange rate.
The central bank had opened various windows to meet the demand for forex by Small and Medium-scale Enterprises, dividend remittances abroad as well as investors and exporters.
The spokesperson for the CBN, Mr. Isaac Okorafor, said the bank put in place the measures to ease the difficulties being encountered by the SMEs and other segments of the economy.
He said SME operators no longer needed to patronise or source for forex through unofficial windows.
According to him, the move has helped to reduce pressure on the Bureau De Change segment of the market.
Okorafor urged all participants in the forex market to cooperate with the CBN and abide by the regulatory guidelines aimed at ensuring hitch-free operations in the market.
It is uncertain if the naira stability will be sustained.
Some experts have doubted the CBN’s ability to wage the currency war against speculators.
The regulator has, however, assured market participants that with the external reserves currently at $30bn and crude oil hovering above $50/barrel, it will sustain the regular dollar injections.
Meanwhile, the naira closed flat at 380 against the United States dollar on Sunday, the same amount it touched on Friday, having reached 390/dollar on Thursday.
After touching an all-time-high of 520/dollar in February, the CBN had increased forex supply into the market to enhance the naira.
As a result, the naira appreciated to 375/dollar in March. However, following some speculative activities and other market dynamics, the local currency fell to 410/dollar two weeks ago.
Last week, the naira reversed the loss and rose to 380/dollar after the CBN increased forex supply.
Currency analysts told our correspondent on Sunday that the naira would record a very slight gain this week even as the CBN steps up its interventions in the market.
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said, “I think the naira may not appreciate significantly above 380/dollar. If there is a slight decline in forex supply, it may do around 385/dollar.
“For now, the naira may not gain significantly further than the 380/dollar until when the CBN chooses to shift the exchange rate for the invisibles.”
