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CBN Moves To Rescue Naira, Injects $370.9m Into Interbank Forex Market

In order to ease difficulties Nigerians encounter in funding foreign exchange transactions, which has affected exchange rates of naira in the parallel market, the Central Bank of Nigeria, CBN, on Tuesday intervened in the interbank FOREX market by injecting a total of $370.9 million to the wholesale market through 23 deposit money banks.

The CBN said the intervention was to help the banks meet the requests of customers and abide by the qualified bids for the U.S. dollars which ranged from N315 to N360, with seven banks receiving full allotments of their respective bids valued at $37.5 million each.

Besides, other banks’ allotments ranged between $46,512.50 and $15.578 million.

CBN spokesperson, Isaac Okorafor, said the bank’s intermediation effort in the FOREX market was the first wholesale intervention to ease the pressures by Nigerians to access foreign exchange towards meeting various obligations under visible and invisible needs categories.

The CBN, Mr. Okorafor explained, had initially offered $500 million for sale to the banks, although not all the banks provided sufficient Naira backing to pay up for their respective bid amounts.

Mr. Okorafor was optimistic the wholesale intervention of the CBN would substantially ease the foreign exchange pressures on visible and invisible needs of customers.

He assured that the CBN would continue to intervene in the interbank market based on qualified bids from the deposit money banks on the requests of their customers.

 

“The CBN is more than ever ready to support the inter-bank market by ensuring liquidity and transparency to guarantee efficiency in the FOREX market,” Mr. Okorafor said.

Urging all market players to contribute their quota to assist in getting the new measures unveiled place by the CBN to guarantee the steady recovery of the financial market as well as the growth and development of the economy to the benefit of all Nigerians.

Last Friday, the CBN, at the end of its meeting with deposit money banks issued new policy actions on FOREX aimed at easing access to foreign exchange for personal and business travel as well as educational and medical fees, among others.

As part of the new policy action announced on Monday, the CBN also directed all banks in the country to open FOREX retail outlets at major airports as soon as logistics permit to facilitate travelers’ ease in settling transactions;

Under the new policy, the CBN offered to provide FOREX directly to Nigerians through deposit money banks to fund personal and business travels, payment of school fees as well as settlement of medical bills.

Meanwhile, a breakdown of the forwards indicated that $216,465,671.02 was for 30 days, while $154,345,139.77 was for 60 days.

Besides, the CBN had also made spot sales of $1.5 million to four banks, totaling $6 million.

In addition, it also offered $41 million for sales, out of which $35 million was taken up for the payment of school fees, medical bills and personal and business travel allowances.

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