19th September, 2015
Central Bank of Nigeria (CBN) has injected dollars into the market on Friday after a lull in foreign exchange trade for a few days, the managing director of the market regulator said on Saturday.
“The central bank intervened on Friday … it sold dollars to the banks so hopefully trade will pick up,” said Bola Onadele, managing director of the FMDQ, a regulator comprising Nigeria’s main commercial banks and the central bank.
He did not say how much the central bank had sold. Nigerian companies and importers have been struggling to obtain dollars because a sharp fall in oil prices has hit the oil-exporting nation’s revenues and naira currency hard.
“There were a few trades in the market, about three to five a day down from 80-100 on average,” Onadele said about trading in recent days.
On Thursday, central bank governor Godwin Emefiele told Reuters he was ready to inject liquidity if needed into the interbank market, which dried up this week following a directive to government departments to move their funds from commercial banks into a “Treasury Single Account” at the central bank.
The policy is part of President Muhammadu Buhari’s drive to fight corruption. Analysts say it could suck up as much as 10 percent of banking sector deposits in Africa’s biggest economy.
The oil sector provides Nigeria’s government with roughly 70 percent of its revenue. The central bank has imposed currency and import restrictions to preserve the country’s foreign currency reserves.
On Thursday, Emefiele ruled out a naira devaluation.