Forex Intervention: CBN Releases $370mn

Sequel to its promise to ease the difficulties encountered by Nigerians in obtaining funds for Foreign Exchange transactions, the Central Bank of Nigeria (CBN) on Tuesday, February 21, 2017, carried out wholesale interventions in the interbank FOREX market by providing a total sum of $370,810,810.79 to 23 banks to meet the visible and inviable requests of customers.

A source at the CBN disclosed that the qualified bids for the United States dollars ranged from N315 to N360, adding that seven banks received full allotments of their respective bids valued at $37,500,000 each. Other banks received allotments ranging from $46, 512.50 to $15,578,081.51.

Confirming the information, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said the Bank’s intermediation in the Forex market was the first wholesale intervention aimed at easing the pressure of access to forex by Nigerians who intend to meet obligations that fall under visible and invisible needs categories.

He further explained that the CBN offered $500,000,000.00 for sale to the banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.
While expressing optimism that the wholesale intervention of the CBN would substantially ease the foreign exchange pressure on visible and invisible needs of customers, Okorafor assured that the Bank would continue to make interventions based on qualified bids from the banks on the requests of their customers.

He reiterated that the Bank was more than ever ready to support the inter-bank market by ensuring liquidity and transparency to guarantee efficiency in the Forex market.

Okorafor therefore urged all market participants to contribute their patriotic quota and assist in ensuring that the new measures put in place by the CBN guarantee the steadiness of the financial market as well as the growth and development of the economy to the benefit of all Nigerians.

It will be recalled that the CBN, after a meeting with Deposit Money Banks (DMBs) last Friday, issued new policy actions on FOREX aimed at easing access to foreign exchange for Personal and Business Travel as well as educational and medical fees, among others.

As part of its new policy action, the CBN also directed all banks in the country to open forex retail outlets at major airports as soon as logistics permit them to do such.

Meanwhile, a breakdown of the forwards indicates that $216,465,671.02 was for 30 days, while $154,345,139.77 is for 60 days. The CBN also on Tuesday, February 21, 2017, made spot sales of $1.5 million to four banks, totaling $6 million. The Bank also offered $41 million for sales out of which $35 million was taken up for the payment of school fees, medical bills and personal and business travel allowances.