Naira set to appreciate further as CBN injects more forex into inter-bank market

Naira set to appreciate further as CBN injects more forex into inter-bank market
May 02 12:38 2017

As the inter-bank forex market resumes after the Workers’ Day holiday, there are strong indications that the Naira is set for a strong showing this week as the Central Bank of Nigeria (CBN) commences another round of forex injections into the invisibles segment of the market.

Industry experts are of the view that the rate of forex liquidity being pumped into the system by the CBN would lead to a depreciation of the dollar against the naira.

The CBN acting Director of Corporate Communications, Mr. Isaac Okorafor, in a chat with business correspondents at the weekend confirmed moves by the apex Bank to inject more foreign exchange into the inter-bank segment of the market, saying it was in line with the commitment of the Governor, Godwin Emefiele, to ensure that those who had legitimate need for foreign exchange were guaranteed access to it.

While stressing that the actions of the bank were in sync with its mandate of safeguarding the value of the local tender, Okorafor said the CBN remains determined to achieve a convergence of the rates in the interbank and Bureau de Change segments.

With the latest policies of the CBN, which cater specifically for SMEs, exporters and importers, market analysts are of the strong view that the Naira would firm up against other major currencies when trading commences this week.

Speaking at the weekend, frontline entrepreneur, Tony Elumelu also disclosed that global investors were excited about the forex policies of the CBN, which he stressed had brought predictability to the forex market.

It will be recalled that the CBN recently issued a forex policy statement establishing special windows for Small and Medium Enterprises (SMEs) to enable SMEs import eligible finished and semi-finished items not exceeding $20,000 for an enterprise per quarter. The Bank also established an “Investors’ & Exporters’ FX Window” aimed at encouraging foreign investors in the country’s forex market.

Okorafor again urged all stakeholders to play their respective roles in ensuring a smooth running of the foreign exchange market for the benefit of the Nigerian economy.