CBN Sells $100m to SMEs … makes $100m spot wholesale … May open window for dividend remittances

 

 

Yemisi Izuora

The Central Bank of Nigeria, has continued to make foreign exchange available to critical sectors of the economy. 

The bank today Tuesday made spot sale totaling $100 million under its newly opened Forex window for small scale importers to Small and Medium Enterprises (SMEs), who are involved in the importation of critical and eligible finished and semi-finished goods.

Also today, the CBN released its results of 7 – 30 days forwards wholesale of $100million, even as authorized dealers subscribed fully to the $100 million offered by the CBN at the forex auction in the interbank wholesale window on Monday, April 10, 2017.

The Acting Director, Corporate Communications at the CBN, Isaac Okorafor, disclosed these in a chat with newsmen, saying that the new window for SMEs provides small scale importers an avenue to source forex to boost their respective businesses through the importation of eligible finished and semi-finished items. He, however, restated that no SME will be allowed to transact more than $20,000 per quarter.

Some authoritative sources at the CBN have also hinted that in an attempt to boost forex supply, the CBN will soon not only begin spot forex auction sales, but also open a special window for investors to trade freely for certain eligible transactions particularly dividends and investment remittances .

There have been doubts over the ability of the apex bank to sustain the current rate of liquidity in the market. Some experts have, however, pointed out that going by the current level of reserves, the accretion from oil revenues and the subdued level of demand, the CBN has the capacity to sustain supply even if it has to keep doing so for the next three months. They pointed out that last September, the Bank survived with a reserve level as low as $24bn, reasoning that the gap between that and current levels stands at over $6bn, an amount that can sustain the market for a long time, coupled with ongoing steady accretion from global oil prices.

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