By Tunde Osho
The naira will be stable this year as the Central Bank of Nigeria (CBN) continues its regular dollar injections into the foreign exchange market, traders have said.
The naira has been hovering at N360 to a dollar for investors, around the same level as in the parallel market. On the official market, it has been quoted at N306.05, a level at which the CBN has been intervening.
Series of dollar injections into the economy totaling about $8 billion since February have helped the CBN to achieve long-term naira stability and curb volatility in the foreign exchange (forex) market.
The CBN has in the last 10 months, sustained its weekly dollar interventions in the forex market, a large part of it go into the interbank market, bureau de change (BDCs), Retail Secondary Market Intervention Sales (SMIS), wholesale spot and forwards auction segments, agricultural, airlines, petroleum products and raw materials and machinery sectors among others.
The dollar injections were made to enable stakeholders in these segments secure enough forex for their operations, and in the process boost naira’s stability.
Noteworthy, the gap between official and black market rates started to shrink since February 20, when the CBN resumed dollar interventions in key segments of the economy.
In line with its intervention policy, the CBN had recently injected $287.89 into the SMIS.
Data received from the CBN revealed that the figure was in favour of the agricultural, airlines, petroleum products and raw materials and machinery sectors.
The bank’s Acting Director, Corporate Communications Department, Isaac Okorafor confirmed the figures, noting that the releases were targeted at sustaining liquidity in the market as well as boosting production and trade.
He reiterated that the bank remained committed to ensuring liquidity in the inter-bank sector of the market and would continue to intervene in order to drive growth in the economy and guarantee stability in the market.
With Friday last week’s rates hovering around N359 and N360/$1. Okorafor was upbeat that the bank’s forex intervention had effectively checked speculations around the Naira.
He, however, disclosed that the bank would continue to ensure enforcement through utilisation report and market intelligence.
It will be recalled that the CBN had last Monday, also intervened in the inter-bank Foreign Exchange Market to the tune of $210 million comprising of $100 million for the wholesale segment and $55 million each for the Small and Medium Enterprises (SMEs) and invisibles segment.