As expected, the value of the naira strengthened last week while the foreign exchange reserve of the country rebounded to $34.08 billion due to the disbursement of the International Monetary Fund (IMF)’s Rapid Financing Instrument (RFI) loan of $3.4 billion to Nigeria.
Also, the Central Bank of Nigeria (CBN)’s resumption of foreign exchange sales to all commercial banks and Bureau De Change (BDC) boosted the strength of forex reserves.
According to the data obtained from the official website of the CBN, the Fx reserves grew by $564.3million to $34.08 as at May 6, 2020 from $33.52bn which it was at the end of April.
The CBN exchange rate remained unchanged at N361/$ while it appreciated against the pounds sterling and the euro to trade at N447.24 and N391.46 from N449.04 and N394.86 respectively.
Meanwhile, at the Investor and Exporter (I&E) window, the naira depreciated to N387.25 as at the close of trading on Friday from N384/$ which it was as at the beginning of the week. However, the turnover fairly rose to $238.75 million, a slight improvement when compared to $160.08 million which it recorded in the last week of April.
Data obtained from the Association of Bureau de Change Operators of Nigeria (ABCON) last week showed that the naira opened the week on a strong note as it appreciated to N430/$ after depreciating consecutively during the lockdown to N462/$.
Although, it later fell to N440/$ as at the end of trading on Friday. The pounds sterling and the euro traded at N530 and N460 respectively as at May 7. At the black market the naira closed at N445/$.
It can be recalled that the director, corporate communication of the CBN, Isaac Okorafor disclosed last month that, “In view of the gradual easing of the COVID-19 lockdown both globally and in Nigeria, the Central Bank of Nigeria (CBN) will resume provision of foreign exchange to all commercial banks for onward sales to parents wishing to pay schools fees and SMEs wishing to make essential imports needed to revamp economic activities across the country.
“In particular, the CBN is resuming the provision of over $100 million per week for both categories.” He stated that the CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels, and other designated retail uses, as soon as international flights resume.
“With these actions, the CBN wishes to reiterate that it is adequately meeting the needs of all legitimate users, and our continued capacity to do so should not be in doubt. There is therefore no need for panic by any end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates.
“Given this, the Bank has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities,” he said.