Naira firms up as CBN resumes intervention with $418m

The exchange rate at the parallel market remained stable at N367 to the dollar yesterday, as the Central Bank of Nigeria (CBN) again injected $418m into foreign exchange market.

The intervention, which cut across various segments of the inter-bank forex market, was aimed at pushing for the convergence of various market rates and resumption of support for the Naira, after a week lull.

This is coming as financial market operators said $2.2b transactions were attracted at the newly launched Investors and Exporters (I&E) FX Window of the market.The CBN figures showed that the retail segment of the market received the highest intervention of $226m, followed by the wholesale window that received an allocation of $100m.

The Small and Medium Enterprises (SMEs) window received $50m, while the invisibles segment, comprising Business/Personal Travel Allowances, school fees and medicals received $42m to meet customers’ demands.

The bank’s spokesman, Isaac Okorafor, who confirmed the development said the volume of currency trading in the Investors & Exporters window had cumulatively hit $2.2b since the apex bank introduced it in April to boost liquidity in the forex market and ensure timely settlement of eligible transactions.

He expressed confidence that the interventions would continue to guarantee stability in the market and ensure availability to individuals and business concerns.The CBN had on Monday, injected $413.5m into the inter-bank market in its bid to guarantee liquidity in the market, as well as shore up the value of the Naira.

An analyst stated that the increase in the volume of transactions in the Investors’ & Exporters segment was a positive sign of increasing confidence in the financial market, which has also manifested in stock market activities.

Meanwhile, Nigeria would be issuing its first sovereign Islamic Bond known as sukuk worth N100b within two weeks.Plans have reached advanced stage for the debut of a $300m Diaspora bond, with roadshows in Britain during week. This will extend to Switzerland and the United States.The Debt Management Office (DMO), said its proceeds will be used to fund road projects.

The Islamic bond is being scripted as seven-year tenor and would be traded on the Nigerian Stock Exchange (NSE) and over-the-counter platform of the FMDQ Securities.

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