CBN lifts FX market with $279.13m, CNY46.92m as  Naira appreciates at I &E FX window

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The Central Bank of Nigeria (CBN) has again made interventions in the Retail Secondary Market Intervention Sales (SMIS) of the Foreign Exchange market totalling $279.13 million and CNY 46.92.

Figures of the sales consummated on Friday revealed that the sum of $279,128,518.66 was injected to meet requests of customers in the agriculture, airlines, petroleum products and raw materials and machinery sectors

The Bank’s Director, Corporate Communications Department, Mr. Isaac Okoroafor also confirmed that the sum of CNY46,924,114.04 was for payment of Renminbi-denominated Letters of Credit for agriculture as well as raw materials Friday’s transaction was in addition to the $210 million injected into the Wholesale, Small and Medium Enterprises, and Invisibles segments of the market on Tuesday, February 5, 2019.

While expressing the satisfaction of the Bank’s management at the stability in the different segments of the foreign exchange market, Okoroafor attributed the level of stability to the Bank’s transparency in foreign exchange transactions

With the exchange rates closing at N358/$1 on Friday, February 8, 2019,  Okoroafor, expressed confidence that the Naira will continue to enjoy stability, given the periodic interventions of the Bank in the inter-bank segment.

Hence, the naira appreciated by 0.27per cent to $361.73 at the Investors &Exporters ( I & E FX) window, but was flat at N361 at the parallel segment. Meanwhile, total turnover at the I&E window surged by 103.5per cent to $1.66 billion with 99.96per cent of trades executed within the N360-369/Dollar band.

Analysts at Cordros Capital said, “Our view on currency continues to favour stability in the medium to short term, as renewed crude price rally continues to underpin higher oil receipts, as well as the resurgence in FPI inflows, thereby supporting the CBN’s sustained interventions.”

In addition, the overnight lending rate expanded by 756 basis points week-on-week (w/w) to 19.42per cent, against prior week’s close of 11.86per cent, amid the CBN’s persisting aggressive liquidity mop-ups, wherein N643.19 billion worth of bills were sold over four auctions, offsetting inflows from matured Open Market Operation (OMO) bills worth N315.32 billion last Thursday.

For this week, inflows worth N677.06 billion — maturing OMO bills (N629.94 billion) and bond coupon payments (N47.12 billion) — will offer support to system liquidity. However, liquidity mop-up and forex intervention by the CBN are likely to exert upward pressure on the overnight lending rate.

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