CBN injects $340m, CNY 69m into Retail SMIS

 

THE Central Bank of Nigeria (CBN), at the weekend, injected $340 million into the interbank retail Secondary Market Intervention Sales (SMIS). This is in addition to the sale of 69 million Chinese Yuan (CNY)  in the spot and short tenored forwards.

The figures obtained from the CBN showed that the United States (US) dollar denominated interventions were only for concerns in the agricultural and raw materials sectors.

According to its Acting Director, Corporate Communications, Isaac Okorafor, the sales in the Chinese Yuan were through a combination of spot and 15-day tenors. He said the exercise, in line with its guidelines, were for the payment of Renminbi denominated Letters of Credit for agriculture as well as raw materials and machinery.

Okorafor also explained that the requests attended to were bids received from authorised dealers, adding that Renminbi’s availability was sure to ease pressure on the Nigerian foreign exchange market.

He attributed the relative stability in the foreign exchange market hugely to the continued intervention of the CBN as well as the sustained increase in crude oil prices in the international market.

The CBN spokesman further assured that the CBN would remain committed to ensuring that all the sectors continue to enjoy access to the foreign exchange required for the business concerns, whether in US dollars or Chinese yuan.

It will be recalled that the CBN on Friday, July 20, announced the commencement of its intervention in the sale of foreign exchange in Chinese Yuan (CNY), marking the concrete commencement of the Bilateral Currency Swap Agreement (BCSA) signed with the People’s Bank of China (PBoC) on April 27, 2018.

The statement announcing the flag-off of the sale had explained that there would be no predetermined spread on the sale of FX Forwards by authorised dealers to end-users under the Special SMIS-Retail, adding that authorised dealers would be allowed to earn 50 kobo on the customers’ bids.

Meanwhile, $1 exchanged for N360 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.35.

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