CBN injects $210 mln into currency market as Naira appreciates against dollar at investors’ window

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

LAGOS, April 24 (Reuters) – Nigeria’s central bank said on Tuesday it had injected $210 million into the interbank foreign exchange market, extending efforts to improve liquidity and alleviate dollar shortages.

The bank said in a statement it had released $100 million earmarked for the wholesale market, $55 million for small businesses and individuals, and $55 million for certain dollar expenses such as school fees and medical bills.

It said it was “ready to inject funds into the market, whenever and wherever necessary, in order to maintain market stability as well as sustain the financial system”.

Nigeria, Africa’s largest oil producer, fell into recession in 2016 largely because of low crude oil prices. Lower oil revenues led to foreign currency shortages because crude sales are the country’s main source of dollars.

It emerged from recession in the second quarter of 2017 as crude prices recovered and militant attacks against Niger Delta oil production facilities ended. However, it has maintained a system of multiple exchange rates in an attempt to reduce pressure on the local naira currency.
Meanwhile the Naira on Tuesday appreciated to N360 to the dollar at the investors’ window, after depreciating for five consecutive days.

The Nigerian currency gained 54kobo to exchange at N360, stronger than N360.54 traded on Monday, while it was sold at N305.7 to the dollar at the CBN window. Trading at the Bureau De Change (BDC) window saw the Naira close at N362 to the dollar while the Pound Sterling and the Euro closed at N510 and N445, respectively.

The Naira exchanged at N362 to the dollar at the parallel market, while the Pound Sterling and the Euro closed at N510 and N445, respectively. Traders at the market expressed confidence in the ability of the CBN to maintain the stability of the Naira at the foreign exchange market.

The 22billion dollars Diaspora remittance recorded in 2017 and the increase in external reserves to about 47 billion dollars, the Naira may be on its way to greater stability. (NAN)

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