After many weeks of absence from the foreign exchange market during which huge unmet forex demands piled up, the Central Bank of Nigeria (CBN) has resumed the sale of forex to banks to clear the backlog said to be in excess of $1.5 billion.
On Monday and Wednesday, the CBN intervened at the investors and exporters window of the forex market, causing the naira to appreciate significantly from N480/$ to N420/$. .
Market sources said the interventions would continue until the backlog is cleared.
Isaac Okoroafor, CBN director, corporate communications, who confirmed the clearance, said the apex bank had said it would intervene when it understands the depth of the situation fully, adding it has started clearing the FX backlog.
It was also gathered that in order to stimulate FX liquidity, CBN has also been intervening at the Investors and Exporters’ (I&E) window, where on Tuesday it sold $5 million and also sold the same amount of FX on the window yesterday.
Bola Onadele, the chief executive officer, FMDQ Group, confirmed the development.
Onadele said: “Since this pandemic started, we must acknowledge that CBN kept the futures market and guaranteed the rates, and that is commendable.
He said the expectation is that the banks would also support the market liquidity by selling, adding that the more everyone sells, the naira would continue to strengthen.