CBN injects fresh $210m into currency market

Godwin Emefiele, CBN Governor has pumped $210m into the currency market

The Central Bank of Nigeria said on Monday it had injected $210 million into the interbank foreign exchange market, extending efforts to boost 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.

The central bank said it: “will continue to manage the forex with a view to reducing the country’s import bills and halting accretion to its foreign reserves.”

It will be recalled that the CBN last intervened in the Retail Secondary Market Intervention Sales (SMIS) to the tune of 262.5 million dollars, to cater for requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

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Meanwhile, the naira continued its stability in the FOREX market, exchanging at an average of N360 to a dollar in the Bureau De Change segment of the market.

The evolution of the foreign exchange market in Nigeria up to its present state was influenced by a number of factors such as the changing pattern of international trade, institutional changes in the economy and structural shifts in production.

The Nigerian foreign exchange market has witnessed tremendous changes.

The Second-tier Foreign Exchange Market (SFEM) was introduced in September, 1986, the unified official market in 1987, the autonomous Foreign Exchange Market (AFEM) in 1995, and the Inter-bank Foreign Exchange Market (IFEM) in 1999.

Bureaux de Change were licensed in 1989 to accord access to small users of foreign exchange and enlarge the officially recognised foreign exchange market.

Exchange rates in the Bureaux de Change are market determined. A parallel market for foreign exchange has been in existence since the exchange control era.

It has been established that scarcity in the official sector and bureaucratic procedures necessitated the growth and development of the parallel market.

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