OTC Retail Forex. CBN Gives Banks Directives.

by Samuel Abasi Last updated on August 5th, 2017,

OTC Retail Forex. CBN Gives Banks Directives. The Central Bank of Nigeria on Monday directed all banks to pay cash over-the-counter to desiring foreign exchange customers. The Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said this was to further ease the access of customers to foreign exchange.

Okorafor also disclosed that the apex bank had adjusted the sale of forex to the Bureau De Change operators to Tuesdays only in order to reduce logistical difficulties. He added that henceforth, the CBN would sell $10,000 only to low-end forex dealers once a week.

The Central Bank of Nigeria (CBN) also injected an additional $240 million into the foreign exchange (FX) market. A breakdown of the intervention by the central bank showed that $90 million was sold directly to banks to meet the requests for retail invisibles while $150 million was also offered to authorised FX dealers through the interbank wholesale auction window.

This came barely one week after the apex bank promised to increase the sale of dollars to Bureaux de Change operators from $8,000 per week to $10,0000 twice a week.

While urging the banks to oblige the genuine requests of customers, he advised customers to report any uncooperative bank to the CBN through available platforms.

Urging the banks to oblige the genuine requests from their customers, the CBN spokesperson advised customers to report through available platforms any bank refusing to cooperate with the CBN.

The CBN spokesperson said the bank was optimistic that latest $150 million offered to authorised FOREX dealers in the interbank wholesale window would be enough to meet the requests of genuine wholesale customers.

During the last auction on March 28, 2017, customers had fully subscribed to the auction, clearing every dollar at stake.

The CBN has been engaged in aggressive supply of forex into the market as it steps up efforts to save the naira from currency speculators.

The CBN has since the beginning of last month made offers and releases to the interbank foreign exchange market in its bid to sustain forex supply to different categories of users.

Commenting on the CBN’s action in recent weeks, Renaissance Capital (RenCap) Limited said in a report yesterday that the convergence of the interbank and parallel rates could be a precursor to the devaluation of the naira to between N350-N390/$1.

The financial advisory and research firm said that the CBN’s fixation with a stable FX rate implied that it would need to sustain its injections to contain the parallel market premium.

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