Reserves inch up to $34.5b as CBN sells $498m in five days

The nation’s foreign exchange (forex) reserves sustained its more than 12-month weekly winning streak, though in slow pace, as it added about $100 million, shoring it up to $34.5 billion.

This is coming just as the country expects the inflow of proceeds of the $3 billion Eurobond that was oversubscribed by about $11 billion and split across 10-Year and 30-Year tranches at issuance yield of 6.5 per cent and 7.625 per cent respectively.

The rise in the reserves’ profile was recorded despite series of interventions by the Central Bank of Nigeria to support the local currency, which in the last one week, totaled $498 million in two separate sales.

Consequently, the naira has maintained stability against the major currencies as data showed that it was able to claim back lost in values in some trading days.

Specifically, the exchange rates across segments have oscillated between N359.98 and N364, in response to demand and supply, as well as the quantity of money in circulation.

At the popular investors window (I&E Window), the rate slightly recovered from a 15 kobo depreciation on Tuesday, from N359.91/$ on Monday to N360.06/$, to close the week at N359.98/$, indicating a seven kobo gain week-on-week.

According to data from Afrinvest Securities Limited, the activity level in the window strengthened compared to that of the previous week, as offshore investors continue to position in Naira assets.Consequently, weekly turnover improved to $727.9 million as at November 24, 2017, against $674.3 million recorded a week earlier, indicating a sustained interest in the window and increasing liquidity in the segment.

Before the close of transactions on Friday, the apex bank injected $287.89 million into the Secondary Market Intervention Sales (SMIS) in continuation of its resolve to guarantee liquidity in the foreign exchange market. Data received from CBN revealed that the figure was in favour of the demands by stakeholders in the agriculture, airlines, petroleum products and raw materials and machinery sectors.

The bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, who confirmed the figures, noted that the releases were targeted at sustaining liquidity in the market, as well as boosting production and trade activities.

As usual, he reiterated that the bank remained committed to ensuring liquidity in the inter-bank sector of the market and would continue to intervene in order to drive growth in the economy and guarantee stability in the market. Earlier in the week, CBN had sold $210 million at the foreign exchange (forex), ahead of the much-anticipated Monetary Policy Committee (MPC) communiqué, which is the last for the year.

Figures of the intervention showed that the Wholesale, Small and Medium Enterprises (SMEs) and invisibles segments received allocations in the transactions.

Specifically, the bank offered $100 million to the wholesale segment, while the SMEs segment received $55 million and the invisibles segment, comprising tuition fees, medical payments and Basic Travel Allowance (BTA), among others, received an allocation of $55 million.