Naira stable on interbank as forex inflow up 34.41%

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Nigerian naira notes are seen in this picture illustration March 15, 2016. REUTERS/Afolabi Sotunde/Illustration/File Photo - RTSFNNR

Nigeria’s naira on maintains stability at the interbank spot and black markets following improved liquidity occasioned by the interventions of the Central Bank of Nigeria (CBN) by way of dollar supply.
Naira was quoted at the rate of N305.75k per US dollar on Tuesday, the same level it traded the previous day. At the unregulated parallel market, the local currency traded at N365 per dollar.
However, naira depreciated by N2.20k to close at N369.50k per dollar on Tuesday from N367.30k per dollar at the investors and exporters window, data from FMDQ revealed.
Total foreign exchange inflows through the CBN increased by 35.41 percent in June 2017 compared with the previous month. Total outflows, on the other hand, decreased by 12.73 per cent during the same period, as a result of reduced CBN intervention in the interbank foreign exchange market, which also reduced the Treasury Single Account (TSA) (dollar) payments balances by 61.4 per cent in the period under review.
According to Godwin Emefiele, governor of the CBN, the positive net flows resulted in an improvement of gross external reserves to $30.30 billion at end-June 2017, compared with $29.81 billion at end-May 2017.
The Monetary Policy Committee (MPC) noted the emerging convergence between the bureau-de-change (BDC) and Nigeria Autonomous Foreign Exchange (NAFEX) segment rates and the stability of the average naira exchange rate at the inter-bank segment of the foreign exchange market during the review period.
The central bank has been intervening on the official market in the last few months to try to narrow the spread between rates on the official market and black market. It has sold over $5 billion since February.
Responding to the question on naira depreciation, Emefiele said the market will decide, adding that the CBN remains a player in the forex market and that the interventions at the market will continue.
The CBN held its benchmark interest rate at 14 percent on Tuesday. Emefiele said two of the eight members who attended the Monetary Policy Committee (MPC) meeting had voted to cut the headline rate.
“In consideration of the headwind confronting the domestic economy and the uncertainty in the global environment, the committee decided by a vote of six to two to retain the MPR (monetary policy rate) at 14 percent,” said Emefiele.
The CBN on Monday boosted liquidity in various segments of the inter-bank foreign exchange market with a total of $195 million.
At Monday’s forex trading, the CBN offered the sum of $100,000,000 as wholesale interventions and allocated the sum of $50,000,000 to the Small and Medium Enterprises (SMEs) forex window. The invisibles segment comprising Business/Personal Travel Allowances, tuition and medical fees, among others, received $45,000,000.

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