Dollar crashes to N445, as CBN offers $100m in currency forwards

The US Dollar on Monday crashed further to close at 445 naira at the parallel market, as the Central Bank of Nigeria (CBN) committed to inject more FOREX into the market to meet the demands of genuine customers.

The CBN yesterday offered $100 million in currency forwards to be delivered within the next 60 days, traders said.

Over the weekend the apex bank had reiterated its commitment to continue supplying enough forex to guarantee liquidity in the FOREX market.

The apex bank’s spokesman, Isaac Okorafor, gave the assurance while noting that the CBN was committed to ensuring that the authorized dealers got sufficient supply to meet the demands of authentic customers of banks.

While disclosing that the Bank had since February 2017 offered over $1 billion to the interbank market, he expressed optimism that stability had been restored to the market, with individuals now being able to easily access forex to address personal and business allowances.

A cursory view of the summary of the CBN intervention in the interbank market over the past two months, shows the highest bid rate was N360/$1, while the lowest was N315/$1.
The bank has consistently been selling foreign exchange to importers since February in a move to increase dollar supply in the market and narrow the margin between official and black market rate.
The local currency was quoted at 307.50 to the dollar on the interbank market at the close of the market for the day compared with 307 a dollar closed on Friday, while it was quoted at 445 on the black market, firmer than 450 a dollar closed on Friday.

Meanwhile, the monetary and fiscal authorities are currently collaborating in order to pull the Nigerian economy out of its current crunch.
Speaking at the just concluded two-day Monetary Policy Committee (MPC) retreat at the CBN Corporate Headquarters in Abuja at the weekend, with the theme: “Pathway to Price Stability Conducive to Economic Growth,” the apex Bank Governor, Mr. Godwin Emefiele, under whose auspices the meeting was convened, reiterated the need for the country’s monetary and fiscal authorities to collaborate and harmonize standpoints so as to develop the economy rapidly.

Mr. Emefiele, who also chairs the Monetary Policy Committee, said the MPC Retreat, which for the first time had in attendance a large representation of the fiscal authorities, was coming at a period when the country faced serious economic challenges. He added that finding a sustainable solution required a broadened participation of colleagues from the fiscal side.

He said that the retreat, as a brainstorming session, would provide perspectives on certain Monetary Policy Committee decisions. He said it would also close the gap on the coordination between monetary and fiscal authorities to chart a common course and take decisions to develop the economy.

In his remarks at the brainstorming session, the Minister of Budget and National Planning,
Senator Udoma Udo Udoma, said both the monetary and fiscal Authorities had no choice but to work together to guarantee the country’s economic growth. He posited that the pathway to lower interest rate was to ensure monetary and fiscal authorities collaboration with the private sector.

Also, Minister of Finance, Mrs. Kemi Adeosun, and her Industry, Trade and Investment counterpart, Dr. Okechukwu Enelamah both agreed that solving challenges facing the Nigerian economy required unconventional tactics.

Adeosun, while disclosing that there remained a huge number of unbanked Nigerians whose contributions to the economy are hardly captured, said the government must devise ways to bring them into the financial mainstream. She also hinted that, based on the current realities, the Federal Government would have to borrow more to meet its infrastructural obligation.

On his part, Dr. Enelamah emphasized the need for both monetary and fiscal authorities to ensure business, market and investor confidence, as well as policy integrity, in order to improve on the ease of doing business in Nigeria.

According to her, there was need for deliberate policies to ensure stability and engender growth in the economy.