New Forex Policy: How CBN Sold Over $600 Million In One Week

Nairametrics| The Central Bank of Nigeria (CBN) has sold over $600 million dollars this week alone as it continues to implement its new forex policy aimed at boosting liquidity in the forex market and narrow the gap between the official rates and the parallel market rates.

Earlier this week, the CBN sold $370 million as part of its intervention, while only yesterday, the apex bank sold yet another $230 million in forward contracts on the official market. These are in addition to the $1.5 million on the spot market to help keep interbank rates at N305.50 per dollar.

That the new forex policy is having the desired effect already cannot be disputed as the increased liquidity has ensured that for the first time in 3 weeks, the parallel market rates have dropped under the N500/$1 line, selling for N490/$1 yesterday.

The question now remains if as the CBN Governor, Godwin Emefiele, requested, the demand side of the forex market will also apply some discipline to its demand. If this does not happen, then one wonders for how long the CBN will be able to continue issuing $600 million weekly.

Chacha Wabara

Chacha Wabara is a legal practitioner, blogger and fitness coach. She has over 5 years experience in blogging and freelance writing. She has written several articles and research work over the years as a freelance contributor. She joins Nairametrics as Our News and Analysis Lead.

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