FOREX POLICY | CBN sells $100m to SMEs

Good news came the way of Small and Medium Enterprises (SMEs) involved in the importation of critical and eligible finished and semi-finished products as the Central Bank of Nigeria (CBN) yesterday made spot sales of $100 million to interested SMEs through its newly opened forex window for small scale importers. 

Also on Tuesday, the CBN released its results of seven-30 days forwards wholesale of $100 million, even as authorised dealers subscribed fully to the $100 million offered by the CBN at the forex auction in the interbank wholesale window the previous day.

Meanwhile, the various interventions at both the interbank market and Bureau De Change (BDC) window notwithstanding, the naira still sustained its loss against the dollar at the parallel market.

The local currency on Tuesday afternoon exchanged between N405 (buying rate) and N410 selling rate at the parallel market. This showed that it was weaker than the N405 traded on Monday. Similarly, the pound sterling and the euro closed at N490 and N430 respectively.

At the BDC window, the naira was sold at N362 to a dollar, while the pound sterling and the euro traded at N500 and N428 respectively. Trading at the interbank market saw the naira close at N306.20 to the dollar.

Currency traders noted that dollar had remained scarce in the market despite the injection of foreign exchange at the interbank market and the BDC window, an indication that speculators may have still been artwork manipulating the currency.

Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON), decried the movement of illicit funds across the nation’s borders.

He said the BDCs were ready to cooperate with the CBN to see rates convergence at the market, urging security operatives to be on the lookout for the movement of “hot money’’ across the nation’s borders.

Meanwhile, the CBN said yesterday it has not relented in providing foreign exchange to end users. The CBN said yesterday it had on April 4 injected $10,000 to BDCs nationwide to checkmate the activities of currency hoarders and speculators.

Acting Director, Corporate Communications of CBN, Isaac Okorafor, stated that the new window provides small scale importers an avenue to source forex to boost their respective businesses through the importation of eligible finished and semi-finished items. He, however, restated that no SME will be allowed to transact more than $20,000 per quarter.

Sources at the CBN have also hinted that in an attempt to boost forex supply, the CBN will soon not only begin spot forex auction sales, in addition to opening a special window for investors to trade freely for certain eligible transactions particularly dividends and investment remittances..

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