The Central Bank of Nigeria’s Investors and Exporters Foreign Exchange window has traded about $3.83bn since it was established on April 24, it has been learnt.
Foreign exchange traders said this on Monday as the naira traded more strongly on the window than on the black market, Reuters reported.
The window, where buyers and sellers are free to agree an exchange rate, was introduced by the CBN in April to try to attract foreign investors into the country and boost the supply of dollars.
Traders said $407m were traded last week compared with $354.8m in the previous week, indicating a gradual return in investors’ confidence to the forex market.
“We have seen continuous improvement in dollar inflow into the market in recent time from offshore investors and this has also reflected in the volume of transactions at the equity market,” one currency trader told Reuters.
Before the window was introduced, the CBN was the main supplier of hard currency on the interbank forex market, after foreign investors fled naira assets in the wake of an oil price slump in 2014.
A CBN spokesman last month said the bank was, on average, responsible for less than 30 per cent of trading on the investor market.
At the forex window, market regulator FMDQ OTC Securities Exchange quoted the naira at 364.56 to the dollar on Monday, versus 367 to the dollar on the black market.
Commercial banks quoted the naira at 306/dollar on Monday, the level they have been quoting for around the last two weeks
Meanwhile, the CBN on Monday injected a total of $142.5m into the inter-bank foreign exchange, a few days after intervening in the retail segment of the market with the sum of $254.3m.
A breakdown of the Monday’s intervention indicated that the bank offered the sum of $100m to dealers in the wholesale segment, while it allocated the sum of $23m to the Small and Medium Enterprises segment.
Those requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance received $19.5m.
The CBN spokesperson, Mr. Isaac Okorafor, said the CBN would continue to carry out its regular mediation in the market so as to keep the market liquid and guarantee the international value of the naira in line with its mandate.