The Central Bank of Nigeria on Monday injected another $210m into various segments of the inter-bank foreign exchange market.
This came on the heels of the regulator’s $304.4m Retail Secondary Market Intervention sales in the inter-bank forex market on Friday.
Despite this, the naira closed at 364/dollar at the parallel market on Monday, the same rate the United States greenback traded against the local unit on Friday.
At Monday’s trading, the CBN offered the sum of $100m as wholesale interventions and allocated the sum of $55m to the Small and Medium Enterprises forex window.
Customers requiring forex for Business/Personal Travel Allowances, tuition and medical fees, among others, equally got an allocation of $55m.
The Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, confirmed the sales, reiterating that the bank would sustain its interventions in the foreign exchange market.
He expressed optimism that the value of the naira would continue to spike in the face of accretion to the foreign reserves and the attendant reduction in the country’s import bill.
While also attributing the stability in the market to the bank’s transparency and cooperation of authorised dealers, he urged all dealers to continue to play by the rule, as the CBN would not hesitate to sanction any erring bank or dealer.
Friday’s sales were in favour of interests in the agricultural, airlines, petroleum products, raw materials and machinery sectors.
Meanwhile, the naira is expected to edge up this week due to tepid dollar demand.
Foreign exchange traders said the naira could firm to 359, as exports fuelled by rising oil prices pick up and offshore investors chase local assets in search of yields, Reuters reported.
On the official market, the naira was quoted at 305.60, supported by the CBN’s regular intervention.
Vice-President Yemi Osinbajo had last Thursday said that a weaker US dollar did not necessarily hurt Nigeria as an oil-producing nation.
The comments by Yemi Osinbajo were made after United States Treasury Secretary Steven Mnuchin welcomed a weaker dollar, saying it benefited the US trade balances in the short term.
“A weaker dollar doesn’t necessarily hurt Nigeria,” said Osinbajo, speaking at the World Economic Forum in Davos.
“We are concerned most about ensuring that we are able to make our own exports cheaper and we working on all of that. Our major concern is how to make ourselves more competitive,” he added.
The welcoming of a weakened dollar, seen by markets as a departure from the usual US currency policy, has been seen as an indication that President Donald Trump is stepping up his attack on China and other big trading partners as part of his America First agenda.
Trump had arrived in Davos on Thursday. Earlier this month the president was accused of using vulgar language for Haiti and African countries, though he denied using the specific language.
“We need each other: Africa needs America. America also needs Africa in several important ways, so for me the most important thing is that we continue to maintain those relationships,” Osinbajo said, when asked about the alleged remarks.
“I‘m also told that Mr. Trump has said that he did not in fact make those statements and we should be able to accept that,” he said.
Kenya’s shilling is expected to weaken slightly this week, after rising to a one-year high last week, according to traders.
Ghana’s cedi could be stable against the dollar this week on increasing hard currency inflows, analysts said.
The local unit was trading at 4.54/65 to the greenback at 1050 GMT, compared with 4.55/00 at last Thursday’s close.
“We expect the cedi to extend its stability as it is expected to trade within the 4.55 and 4.56 band in this week,” Treasury officer of the Accra-based Northstar Home Finance, Raphael Adubila, told Reuters