CBN: Why naira is gaining strength

The Central Bank of Nigeria (CBN) said the recent appreciation of the naira against other currencies was the result of its market monitoring and intervention.

CBN’s acting Director, Corporate Communications, Mr Isaac Okoroafor said this yesterday in Sokoto.

“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,” he said.

Okoroafor said that since the new Forex policy, the CBN had intervened with about $591 million in the market, which had led to naira gaining strength.

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

“That tells you that the real demand is $370 million. When we placed $230 million in the market, only $221 million 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,” he said. (NAN)