Investors, exporters pump $2.2bn into forex market

There are signs that government’s determination to expand foreign exchange sources for the country has begun to yield results as Central Bank of Nigeria (CBN) Tuesday disclosed that exporters and investors have brought in a combined $2.2 billion into the foreign exchange market between since April.

The announcement came on a day that the apex bank injected another $418 million into various segments of the inter-bank foreign exchange market as a way of giving the naira a further lift and ensure timely execution and settlement for eligible transactions.

CBN Spokesman Isaac Okorafor who disclosed this in Abuja said that the volume of currency trading in the Investors’ & Exporters’ (I&E) FX Window had cumulatively hit heights of $2.2 billion since the CBN introduced it on Friday, April 21, 2017.

Analysts see the increase in the volume of transactions in the Investors’ & Exporters’ (I&E) segment as a positive sign of the return of confidence in the financial markets as clearly demonstrated by the activities in the stock market.

According to them, the sentiments of investors had strengthened since the CBN established the I&E FX window in April, which they agreed had ensured greater flexibility in forex rate determination.

They, however, urged the CBN to continue its march towards the convergence of rates.

Figures obtained from the CBN on Tuesday indicate that the retail segment of the market received the highest intervention with a total of $226 million, followed by the wholesale window that received an allocation of $100million.

The Small and Medium Enterprises (SMEs) window received a boost of $50 million while the invisibles segment, comprising Business/Personal Travel Allowances, school tuition, medicals, etc. was allocated the sum of $42 million to meet the demands of customers.

The spokesman expressed confidence that the interventions will continue to guarantee stability in the market and ensure availability to individuals and business concerns.

It will be recalled that the CBN only on Monday, June 12, 2017, injected the sum of $413.5 million into the inter-bank market in its unrelenting bid to guarantee liquidity in the market as well as shore up the international value of the naira.

A breakdown of Monday’s figures shows that the apex Bank offered the sum of $100 million to authorized dealers in the wholesale window, while the Small and Medium Enterprises (SMEs) window was allocated a total of $28 million.

The invisibles segment was allocated the sum of $25.5 million to meet the needs of customers in that sector.

Continued intervention of CBN has seen a measure of naira stability with a high possibility of further strengthening in the FOREX market on Tuesday, exchanging at an average of N363/$1 in the bureau de change (BDC) segment of the market.