Reserves near $34b mark despite interventions
• Naira stable, as CBN sells $481m, threatens sanctions to exporters
The nation’s foreign exchange reserves’ profiles recorded a new increase near $34 billion mark, after gaining about $350 million in one week, with $200 million being recorded cumulatively in three trading days.
The new level of $33.7 billion was achieved despite twice-weekly interventions that have averaged about $400 million in the last one month, although most of them are 30-day and 60-day futures sales.
The reserves’ accretion has been steady, although slow, since August, from a record of $30.8 billion, riding on the back of relative stability in the international price of crud oil and assessed rebound in foreign investments inflow due to prospects of improving business-friendly policies.
At the weekend, investors priced the naira at N360.31 per dollar at the autonomous platform- Investors and Exporters window, a rate they have hovered around for the last three weeks, indicating stability for the local currency.
The Central Bank of Nigeria (CBN) said the window has attracted about $10 billion transactions since its inception in April 2017, as part of measures to contain a one-time highly speculated segment of the financial system.
Last week, according to data from the FMDQ OTC Securities Exchange, transactions at the Investors and Exporters window averaged $108.34 million, indication a return of confidence, although the figure represents a fall in average turnover compared to other weeks.
At the parallel market, it remained N363 per dollar for most part of the last one month, while the official rate is still N305.75 per dollar.Meanwhile, CBN’s intervention in the foreign exchange market reached $80.7 million, having earlier offered $195 million to various segments, before closing the weekly transaction with $285.7 million on Friday.
The weekly closing intervention was targeted at meeting the requests from four sectors of the economy- agriculture, aviation, petroleum and raw materials.
The allocations, based on requests put forward by their respective banks were confirmed by the Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, who said the releases underlined the high level of transparency of the apex bank in foreign exchange management.
According to him, the CBN would continue to play its role in easing the foreign exchange pressure on manufacturing and agricultural sectors through sales under the new flexible Foreign Exchange regime.
Similarly, CBN reiterated it determination to impose sanctions on exporters that violated its rules on the repatriation of export proceeds within a stipulated timeframe.
The Director of Trade and Exchange Department of the apex bank, W.D. Gotring, in a circular to authorized dealers and the general public, said it is a breach of extant rules for any exporter in the oil and gas not to repatriate proceeds in 90 days, while non-oil exports remain 180 days.
Warning that there would be going back to the enforcement of the rules, Gotring added: “Any exporter that that defaults in the repatriation of export proceeds within the stipulated period shall be barred from accessing all banking services, including access to foreign exchange market.”