The intervention of Central bank of Nigeria by the injection of more foreign currency to the economy through the interbank and Bureau de Change Forex market, has significantly improved the value of the nation's currency.
The value of the naira firmed at the parallel market yesterday after the Central bank of Nigeria pumped more dollars to the economy through the interbank and Bureau de Change ends of the foreign exchange market. The naira’s value rose by over 3.75 per cent to N385 per dollar yesterday, up from N400.
Increased dollar sales by the apex bank particularly to the BDC operators had cut back demand pressure on the naira. The CBN this week had increased the amount of dollars it sells to the BDC operators from $20,000 per week to $40,000 per week, having sold an initial $20,000 on Tuesday and another $20,000 on Thursday.
It had also put $380 million into the interbank market to meet forwards, spot and invisibles demand as well as demand by small businesses on Tuesday offering $100 million in wholesale 7-45 days forwards while invisibles such as Basic Travel Allowance, Personal Travel Allowance, medical bills and tuition received $80 million.
The CBN also sold $100 million through the Small and Medium Enterprises (SMEs) window. The apex bank on Wednesday had offered $100 million at the interbank market but banks were only able to take up $68 million as they ran out of naira.
Traders at the parallel market said demand for the greenback had declined pushing down the value of foreign exchange on the streets. The British Pound was also down to £495 to the naira from £503, while the Euro declined to €410 from €433 which it sold on Wednesday.