Naira
stabilises at N360, as CBN sells $501m
The nation’s
foreign exchange market may have scored a positive outlook, at least in the
near term, as the International Monetary Fund (IMF), admitted that there i
s
appreciable progress being recorded.
This is
coming on the heels of recognition by Forbes Magazine that the Governor of the
Central Bank of Nigeria (CBN), Godwin Emefiele, is the winner of “2017 Best of
Africa Achievement” award for foreign exchange reforms, which pushed the market
to stability against all odds.
The IMF
Director of African Department, Abebe Aemro Selassie, during the Africa
Briefing session at the just concluded International Monetary Fund (IMF)-World
Bank Group meetings in Washington DC, said the goal now should be creating a
liquid single foreign exchange market going forward.
“It has been
very good progress on reducing the imbalances on the foreign exchange market
over the last several months in Nigeria, so we are encouraged on that progress.
“If you look
at the gap between the parallel market and the bank rate, which was very wide
initially, where businesses were complaining about not having access to foreign
exchange over the last four to five months, that has changed and we are
encouraged by it,” he said.
Speaking on
the nation’s fiscal policy, he affirmed that the Minister of Finance, Kemi
Adeosun, identified steps that can be taken by way of tax administration, and
making sure that people complied.
“Our guess
is that there would also be need for tax policy changes for Nigeria, which
would go a long way to improve revenue mobilisation. These resources are needed
to strengthen infrastructure in Nigeria, and many schools that have to be built
and health delivery system.
“In terms of
designing tax policies changes, we advise countries and provide technical
assistance in a way that is progressive,” he added.
Meanwhile,
the stock of national reserves has grossed $33.1billion, despite steady
interventions in the foreign exchange market, as the apex bank auctioned
$501.3million during the week for various segments.
The amount,
which came in two separate auctions, appeared as a boost, as $306.3million
offered at the weekend, kept parallel market transactions flat at N362 per
dollar, while investors priced the local unit at N360.43, making gain of 21
kobo in one week.
Central Bank
of Nigeria (CBN’s) Acting Director, Corporate Communications, Isaac Okorafor,
while responding to media enquiries, restated that the apex bank would continue
to offer and increase liquidity as the case may be, based on genuine demands in
the market.
He explained
that CBN has kept faith with its resolve and promises to sustain liquidity in
the market, and ensured that pressures on the market were removed by its
continuous interventions, urging Nigerians not to give in to doubts.
Analyst at
Afrinvest Securities Limited, also expressed optimism that with the price of
crude oil stabilising above $50 per barrel in the last two months, external
reserves would continue to grow steadily.
“We expect
the FGN’s proposed external borrowing to fund 2017 budget to further stabilise
reserves, and support CBN’s capacity to continue to intervene in the forex
market. As such, we expect rates to continue to trade within a tight band at
all segments in the near term,” the analysts noted in its company weekly report.
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