CBN Creates Dollar Glut

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IN keeping with its determination to increase liquidity in the foreign exchange market, the Central Bank of Nigeria, CBN, on Monday, February 27, released another $100m into the wholesale forwards segment of the market and pumped an additional $80m into the banks specifically for the settlement of dollar demand for school fees, medicals and Personal Travel Allowance, PTA, among others.

In a release by Isaac Okorafor, its spokesman, the CBN said that its commitment to providing enough forex for legitimate business remained unshaken, promising that it would do “everything possible” to ensure the steady supply of forex to the market.

It will be recalled that efforts by the CBN in making available large amounts of forex to the market has led to the appreciation of the Naira by over N85 in less than one week. There are fears in the market that the local currency may well be on a permanent journey to its natural value put by some analysts at less than N300 to the dollar.

The CBN had maintained that much of the dollar demand had been a bubble created by speculators and hoarders of the greenback. On a radio programme on Monday, February 27, the apex bank had warned market players and keepers of dollars to make hay and sell their holdings in order to avoid heavy losses.

— Feb 21, 2017 @ 18:10 GMT

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