Naira Got A Boast With $255m CBN Intervention

The country’s currency Naira, got a boast yesterday as the Central Bank of Nigeria (CBN) lifted the foreign exchange forex market.

Central Bank of Nigeria (CBN), lifted the market with a $255 million intervention, this is to ease pressure on the local currency, the Naira.

The intervention will assist the naira against the foreign currencies, in appreciation. Hence it will increase dollar inflow into the market.

The breakdown;

The CBN intervention showed that $100 million was released for the wholesale segment of the market for both spots and forwards. 

Basic Travel Allowance (BTA), which comes under invisibles segment, got $50 million. 

The Small and Medium Scale Enterprises (SME) segment received $55 million.

It is believed that the currency forwards being auctioned would be settled within 60-days and backed by customer demand.

The naira was exchanging at N381 to the dollar in the parallel market, and could strengthen further as currency speculators abandon the market over fears of recording huge losses.

It should be noted that the local currency, Naira has appreciated from its record low of N520 to the dollar in February.

It should also be noted that the countries woos, that is Nigeria’s currency crisis, was triggered by low oil prices, which have adversely affected its foreign reserves and created chronic dollar shortages. 

It was the need to curb these dollar shortages that prompted the CBN to regularly inject dollars into the market in order to narrow the gap between official and black market rates.