Intelligent work led to appreciation of naira, says CBN

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The Central Bank of Nigeria (CBN) says intelligent work led to the recent appreciation of the naira against other currencies.

Isaac Okorafor, acting director, corporate communications of the bank, said this on Thursday, dismissing the reports that illegal sales of foreign currencies at ridiculous rates was responsible for the change in forex policy.

“I want to state categorically that there is no relationship whatsoever between the allegations that dollar was being sold at 61 kobo and the current appreciation of the naira,” NAN quoted him as saying.

“What led to the appreciation of the naira was that the CBN did an intelligent work on the market and realised that what was driving the demand on the Bureau De Change (BDCs) and parallel market was speculation.

“We reasoned that since there is a lot of pressure on the two segments from people seeking to buy foreign currencies for BTA, tuition and medicals, that if we successfully address that, the pressure will come down.

“Also, before now, the level of our reserves was not enough to make us comfortable enough to really do the kind of intervention that is required.

“We decided to do so now because we are a bit more comfortable with our level of reserve.”

Okoroafor said since the adjustment of the forex policy, the CBN has injected about 591 million dollars in the market.

“Let me also state as proof that when we placed 500 million dollars in the market, only 370 million dollars was taken,” he said.

“That tells you that the real demand is 370 million dollars. When we placed 230 million dollars in the market, only 221 million dollars was taken.

“Anybody who has gone foul of the law and the security agencies have caught up with him, should go and face his or her case and stop causing confusion among participants in the market.”

The naira regained strength at the parallel market after CBN announced an adjustment of its forex policy.

The Nigerian currency now trades at N450 to$1 dollar at the parallel market.

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