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In continuation of its periodic intervention in the foreign exchange market, the Central Bank of Nigeria, on Tuesday, injected another sum of $210m into the inter-bank foreign exchange market.
Figures released by the CBN indicated that authorised dealers in the wholesale segment of the market received $100m, while the Small and Medium Enterprises and the invisibles segments were allocated $55m each.
The Director, Corporate Communications Department, CBN, Mr Isaac Okorafor, restated the bank’s resolve to always meet the request of genuine customers in the various segments of the market.
Recall that on Friday the bank injected $289.76m into retail Secondary Market Intervention Sales and CNY38.70m into the spot and short-tenored forwards of the inter-bank foreign exchange market.
Meanwhile, the naira on Tuesday continued to exchange at an average of N360/$1 in the Bureau De Change segment of the market.
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In the first half report of the CBN, the regulator stated that it sustained its intervention at the interbank and BDC segments, to engender stability in the foreign exchange market.
Records from the regulator showed that in the half year report of 2018, the CBN increased the frequency of foreign exchange cash sales to the BDCs from twice to thrice per week, and adjusted the selling rate, downward to N357/$.
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CBN signals end to official rate regime for naira
The Central Bank of Nigeria (CBN) may soon allow the naira to freely find its value, with a possible depreciation on the official rate, usually pegged at about N305/$, an update on its website has indicated.
The development is signaling an end to the most criticised foreign exchange rate window, which has been used mostly for government’s critical businesses that affect the public, particularly the importation of petroleum products.
If the move sees light of day, it will mean that the value of the naira at the official window is depreciated with its concomitant closure of the peg.
Yesterday, the apex bank, as opposed to the usual publication of the fixed exchange rate, opted to publish that “the rate will be market-determined.”
According to a report, the President of Shippers Association of Lagos State, Jonathan Nicol, said the Nigeria Customs Service had allegedly directed importers to pay for duties at the rate of N326 per dollar against the official rate of N306, citing an order from the CBN.
Also yesterday, the interbank rate depreciated by 0.2 per cent to N360.43 per dollar at the close of trading, while the parallel market remained steady at N360 per dollar.
A move toward a market-determined exchange rate would be welcomed by investors, who have long accused government of some level of capital controls and bemoaned multiple exchange rates.
The Chief Executive Officer of Nigerian Investment Promotion Council, Yewande Sadiku, was quoted as saying the apex bank was in talks with other agencies to move to a single rate for the nation’s currency.
For an economic analyst at Ecobank, Kunle Ezun, “putting that on the website means the central bank is gradually moving towards a single exchange-rate window. It is making the exchange rate more liquid to attract more inflows.”
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