CBN injects $210m into forex market: The Central Bank of Nigeria (CBN) on Wednesday further intervened in the forex market by supplying the the inter-bank Foreign Exchange market with the sum of $210 million.
The bank offered the sum of $100m to authorized dealers in the wholesale segment of the market while the Small and Medium Enterprises (SMEs) segment received the sum of $55m
Also, the sum of $55m was apportioned to invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA).
The CBN’s Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, said the bank’s continued intervention in the forex market is to ensure the availability of foreign exchange to genuine customers.
It will be recalled that the CBN recently ordered banks not to deny genuine travelers Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) as there are enough dollar supplies to meet the demand.
That was followed by the CBN governor, Mr. Godwin Emefiele, leading bank examiners to conduct on-the-spot assessment of forex sales in the DMBs on Monday, May 28, 2018.
Meanwhile, the naira, on Wednesday, May 30, 2018, exchanged at an average of N363/$1 in the BDC segment of the market representing three naira gain to the dollar. It had on the previous day exchanged for N367.
…directs banks to pledge N1bn on OTC trade
The bank has also directed Deposit Money Banks (DMBs) to pledge collateral of N1bn worth of government/CBN securities for OTC trade settlement.
In a circular dated May 31, 2018, and signed by Dr. Alvan Ikoku, the Director, Financial Markets Department said the directive takes effect from June 1, 2018.
Over-the-counter (OTC) or off-exchange trading is done directly between two parties, without the supervision of an exchange.
OTC collateral enables customers to cover all their derivative exposures from a single collateral pool.
The circular titled “Pledge of N1bn worth of government/CBN securities for OTC trade settlement” read “the Central Bank of Nigeria (CBN) in an effort to enhance efficiency in the trading and post-trade activities and build confidence in the financial markets, hereby directs all deposit money banks (DMBs) to pledge collateral of N1bn worth of government/CBN securities for OTC trade settlement.”
It said “the pledge requirement is mandatory for all DMBs that wish to participate in OTC trade settlement.”