CBN clears $4bn accumulated foreign exchange demand, vows to further improve on FX market

Nigeria’s new foreign exchange market made a robust take-off yesterday, Monday, June 20, 2016, clearing all the backlog of  $4bn pent-up demand for foreign exchange with the Naira exchanging at 280 to the US dollar.

The Ag. Director Corporate Communications of the Bank, Mr. Isaac Okorafor, said last night that the CBN was happy that its objectives to clear the FX demand backlog, perform its role as strictly a market intervention participant; and re-launch a functioning and efficient inter-bank market, were being met.

He said: “The CBN, in line with its desire to promote a transparent, liquid and efficient market, and in order to engender market confidence and ensure credible price formation, intervened in the market through a special Secondary Market Intervention Sales (SMIS) addressing the issue of the FX demand backlog by clearing $4.02bn through spot and forward sales. This served in no small way to stimulate price discovery, with the determination of a marginal rate of $/N280.00 through the Special SMIS process.”

“So, we can state to you categorically, that the FX demand backlog has now been cleared and behind us for good,” Okorafor added.

He further assured the market participants and the general public that the bank was resolutely committed to making the Nigerian FX market globally competitive, credible, transparent, liquid, and efficient. He lauded market participants that collaborated in their conduct to achieving these feats and looked forward to another successful and historic day on June 27, 2016, when the market launches its innovative hedging product, the Naira-settled OTC FX Futures.

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