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Nigeria’s central bank new special Forex sale to impact on liquidity

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Operators of Bureau de Change in the country have applauded the decision of the Central Bank of Nigeria (CBN) to offer them a new forex sale window to ease access to hard currencies.
Alhaji Aminu Gwadabe, the Chairman of the Association of Bureau de Change Operators of Nigeria (ABCON), in a chat with DAILY INDEPENDENT at the weekend, said the decision of the apex bank is welcomed, especially as the Christmas celebration approaches.
He also stated that it will impact on liquidity in the BDC’s segment of the foreign exchange market and that it will checkmate spike in the system.
He stressed that the intervention brought the dollar-naira exchange down by 0.81 per cent at the close of trading on Friday when the Naira appreciated by N3 from N370 for the better part of last week to N367 after the CBN’s new intervention.
According to the apex bank, the special intervention became necessary due to an upsurge in demand for forex by members of the public.
The CBN said in circular TED/FEM/FPC/GEN/01/005, dated November 29, 2018 and signed by the Director of Trade and Exchange Department, Mr. Umar Abdullahi, that the special intervention would take place every Thursday, beginning from next week.
The bank warned that the any BDC operator who was involved in infractions on the $15, 000.00 special forex interventions would be sanctioned.
The circular reads in full: “This is to inform Bureau de Change (BDC) operators and the general public that with the approach of the yuletide season and the resultant increase in demand for Personal/Business Allowance, the CBN has in addition to the existing market days (Monday, Wednesday and Friday) has introduced a special intervention day every Thursday for $15, 000.00 per BDC, commencing Thursday, December 6, 2018.
“Consequently, all BDCs should note that the cut off time for receiving Naira deposit into their respective bank accounts for the Thursday special intervention shall be 10.00am on Thursdays. Kogi unseals telcos facilities after NCC intervention
“All operators are hereby advised to ensure strict compliance with the provisions of extant regulations on the disbursement of forex cash to their respective customers as any case of infraction will be appropriately sanctioned.
Meanwhile, the Central Bank of Nigeria (CBN) has continued its intervention in the retail Secondary Market Intervention Sales (SMIS) by injecting a total of $331.22 million in that segment of the market, in addition to CNY51.86 million in the spot and short-tenored forwards segment.
The figures obtained from the Bank on Friday, November 30, 2018, revealed that the US dollar-denominated interventions were for requests in the agricultural and raw materials sectors while the Yuan was for Renminbi denominated Letters of Credit.
Confirming the figures, the CBN’s Director, Corporate Communications Department, Mr. Isaac Okorafor, reiterated that the Bilateral Currency Swap Agreement (BCSA) with the Peoples’ Bank of China was achieving its major objectives of reducing the use and influence of a third currency transactions; reducing the pressure on the naira exchange rate; easing trade transactions between Nigeria and China and maintaining financial market stability in Nigeria.
He further assured that the CBN would remain committed to ensuring that all the sectors of the foreign exchange market continue to enjoy access to the needed foreign exchange by Nigerians.
It would be recalled that the Bank on Tuesday, November 27, 2018 intervened in the inter-bank Foreign Exchange Market to the tune of $210 million.
Meanwhile, $1 exchanged for N369 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.

SOURCE; independent.ng

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