- CBN’s Planned Interventions May Crash Dollar Further
The United States dollar may record further loss this week as indications have emerged that the Central Bank of Nigeria is planning to carry out more interventions in the interbank market.
It was learnt on Sunday that the CBN had concluded an arrangement to pump more foreign exchange into the interbank space to meet the demands of genuine wholesale and retail customers.
This, CBN sources said, was aimed at strengthening the value of the naira against other international currencies, especially the greenback.
The naira has been recording significant gains against the US dollar, United Kingdom pound sterling and euro in recent weeks.
The local unit crashed at the parallel market from 520/dollar recorded over one month ago to 385/dollar on Friday.
Retail currency dealers said on Sunday that the dollar, euro and the pound was going for N375, N405 and N475, respectively, over the weekend.
They said the foreign currencies might go southwards further against the naira if the CBN pumped in more forex into the interbank space.
The Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, said the regulator was planning to inject more forex into the market this week.
The CBN, he said, was committed to sustaining the tempo of liquidity in the interbank market for the sake of different categories of genuine end-users.
He, therefore, urged authentic prospective customers to freely approach their respective banks with relevant requirements to apply for the purchase of foreign exchange, assuring that the banks had adequate supplies to meet genuine needs.
Okorafor also warned forex dealers against engaging in acts capable of disrupting the smooth operations of the forex market, stressing that the CBN would penalise any organisation found guilty of bending the rules.
The CBN has so far injected over $1bn into the forex market in the past one month as it steps up efforts to stabilise the naira.
During the last intervention, the CBN offered $100m for sale to authorised dealers but only $82m was bought.
It is yet unclear if the CBN is ready to crash the dollar below the current rate sold to end-users seeking forex for personal travel allowance, medical bills and school fees.
Some analysts believe the regulator may not be ready to make such move at the moment.