Market News
CBN Sustains Multiple Measures To Stabilise Naira, Boost Reserves - NEW TELEGRAPH
The Central Bank of Nigeria (CBN) has continued to take major steps to keep the naira stable in line with its exchange rate stability objective. Kelechukwu Mgboji reports
The apex bank has intensified interventions in the market, boosting FX supply to retail end users, reducing distortions in the market and maintaining effective foreign reserves management and accretions.
Liquidity injection
The injection of liquidity into the market and rising compliance with FX regulations have reduced sharp depreciation of the naira at official and parallel markets and buoyed foreign investors interest on domestic economy.
The timely interventions of the Central Bank of Nigeria (CBN) through policy implementations and injection of liquidity into the forex market, effectively halted naira slide and restored stability in the forex market.
Aware of its exchange rate stability mandate, the apex bank recently injected $360 million through authorised dealers into the market, which helped to mitigate a steeper devaluation amid the resurgence of demand pressures.
The official FX rate exchanges at N1,530/$, while the local currency exchanges at N1,580/$ at the parallel market. CBN’s robust interventions — including last week’s selling of $360.00 million to authorized dealers have continued to help stabilize the naira.
The naira stability is also driven by inflows from Foreign Portfolio Investors (FPIs), substantial contributions from international oil companies (IOCs), and the CBN’s $18.40 million previous interventions to authorised dealers.
There is also renewed interest of Foreign Portfolio Investors (FPIs) in the FX market— driven by improved market confidence, a more efficient FX framework, and strengthening macroeconomic conditions.
