CBN to pump more dollars as naira keeps appreciating

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The naira traded at 455 to a dollar amid liquidity boost in the Bureau De Change and parallel market segments of the forex market on Friday and Saturday.

The naira also appreciated against the pound sterling and euro as it traded at 545 and 470 to both currencies, respectively.

Travelex, an international money transfer services operator, sold the naira at between 370 on Monday and N375 on Friday to a dollar.

The country’s overnight lending rate dropped to around 12 per cent on Friday from 16 per cent a week earlier as maturing bills and government budget disbursements pumped more cash into the money markets.

Traders said the market opened on Friday with a cash balance of N9bn, against a deficit of about N2.3bn last week. The central bank repaid about N70bn in matured bills on Thursday to boost liquidity.

Meanwhile, the country’s foreign exchange reserves rose above $30bn as of March 8 to its highest level since October 2015, the CBN data showed on Friday.

The country’s dollar reserves have increased by 15.02 per cent since the start of the year on the back of increased oil prices and stabilising conditions in the Nigeria Delta. Statistics on the CBN website revealed that the foreign exchange reserves increased from $24bn on November 9, 2016 to $28.7bn on February 9, 2017.

The data also showed that within two months, the reserves increased by $3.8bn or 15.3 per cent from $24.9bn recorded on December 9, 2016 to $28.7bn on February 9, 2017. There are strong indications that the Central Bank of Nigeria (CBN) is unrelenting in its move to ensure liquidity in the interbank FOREX market, as it will inject more foreign exchange into market early this week. The information about the action of the apex bank, which became rife over the weekend, has reportedly sent jitters to those currency speculators who hitherto took advantage of the scarcity of foreign exchange in the recent past.

Confirming the proposed additional foreign exchange injection into the system to newsmen in Lagos over the weekend, the Acting Director, Corporate Communications of the CBN, Mr. Isaac Okorafor said that bank was determined to sustain the provision of liquidity in the foreign exchange market in order to enhance accessibility and affordability for genuine end users.

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