CBN Sells $367m To Boost Forex Supply

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The Central Bank of Nigeria, CBN, yesterday, continued its intervention in the interbank foreign exchange market by selling another $367 million to meet forwards request of customers.

Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, confirmed this development, saying the $367 million comprises $144,073,753.07 for 45 days forwards, while $223,060,576.86 was for 60 days.

He added that the move was in line with the bank’s determination to ease the foreign exchange pressure on various sectors through forward sales under the new flexible Foreign Exchange regime to keep the market liquidity.

Last week, the apex bank intervened in the foreign exchange market by selling $180 million on Monday and $350 million on Friday in a bid to sustain the appreciation of the naira in the parallel market.

The interventions were followed with a directive on Sunday to banks to process foreign exchange demand for travel allowances by their customers.

The CBN gave this order in a circular to all banks signed by the Director, Financial Markets Developments, Mr. Alvan Ikoku.

Entitled, “Update to Foreign Exchange Directives”, the circular stated: “In view of the CBN’s willingness, capability, and determination to meet FX demand in the market, and in order to further increase foreign exchange availability to all end-users and ensure that a fair and verifiable exchange rate operates in the market, all banks are hereby directed as follows:

“Open a teller point for all retail FX transactions, including buying and selling, in all locations in order to ensure access to foreign exchange by their customers and other users, without any hindrance;

“All banks must have an electronic display board in all their branches, showing rates of all trading currencies, and customers must insist on processing FX transactions based on the displayed rates;

“Banks are mandated to process and meet the demand for travel allowances (PTA/BTA) by end-users within 24 hours of such application, as long as the end-users meet basic requirements already outlined in earlier directives; and banks are mandated to process and meet demands for school fees and medical bills within 48 hours of such application.

“Please note that this directive is effective immediately and non-compliance would attract sanctions including but not limited to being barred from all future CBN exchange intervention.”

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