Why Naira is appreciating—CBN Abuja Bureau Chief
SOKOTO— The Central Bank of Nigeria, CBN,
has said the nation’s currency, Naira, has
being gaining against major international
currencies in the foreign exchange market in
recent weeks due to its decision to deepen its
intervention in the market.
Mr. Isaac Okoroafor, CBN’s spokesman told
journalists at a press conference in Sokoto,
yesterday, that the bank provisions had
outstripped demand on two consecutive
interventions in recent times.
Naira
According to him, on the first occasion, the
CBN placed $500 million but that only N$370
million was taken. He added that on a second
occasion, the apex bank placed $230 million
and that only $221 million was taken, to
demonstrate that the pressure was easing in
the market.
He refuted claims in social media reports that
the current appreciation of the Naira was
because a self-acclaimed whistleblower
exposed an alleged corruption in the forex
market where it was alleged that some people
received dollars at a rate as low as 61 kobo/
$1.
Mr. Okoroafor said: “I want to state and make
it categorical that there is no relationship
whatsoever, between the allegation by the so-
called person that dollar was being sold at 61
kobo and the current appreciation of the Naira.
“I want to state that what led to the
appreciation of the Naira include the following:
*The CBN has done its intelligence work in the
foreign exchange market and we came to the
realization that much of what was driving the
demand in the BDCs and the parallel market
was a bubble, speculation.
“And we reasoned that since there was
pressure on those two segments from people
seeking foreign exchange for PTA (Personal
Travel Allowance), medicals and tuition, that if
we successfully address those needs, that the
pressure will come down.
“The other issue was that the level of our
reserve before now. We didn’t feel
comfortable enough to do the kind of
intervention that we required.
“Now we have decided to undertake the
intervention at this time because we are a bit
more comfortable with the current level of our
reserve.”
And because of that we intervened in the
market and the market reacted positively and
the
Naira began gaining strength.
“Let me also state and prove that when we
placed $500m in the market , only $370 million
was taken. And that tells you that it was all
bubble. The real demand was $370 million.
When we placed $230 million in the market,
only $221 was taken up. It is as simple as
that.
“Anyone who has gone foul of the law and the
law has caught up with him should go and face
his or her case and stop causing confusion
among participants in the market. I need to
make this clear.”
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