Chevron, Schlumberger forex injection gives Naira edge


The Naira on Wednesday appreciated against the United States’ dollar for the second consecutive time, this week, closing the week at N148.71/$. Apart from the ability of the Central Bank of Nigeria (CBN) to meet demand, foreign exchange (forex) supply got additional boost with Chevron and Schlumberger providing $51 million to some banks.

The multiplier effect of the huge supply at the official market was also felt at the inter-bank market where the Naira appreciated from N151.40 to the dollar it closed Tuesday to N151.35 to the dollar on Wednesday.Analysts say the rise in the value of the Naira is as a result of CBN’s ability to meet effective demand in the last few months. For instance, the Naira strengthened at the official market after the apex bank sold $273.5 million on Wednesday, compared with the $384 million it sold earlier on Monday. The central bank had offered $300 million on Wednesday and $400 million on Monday.

In the month of May, there was a surge in demand for foreign exchange when compared with market activities in the previous month. The surge in demand was tied to the recovery in the economy.The central bank offered $2.30 billion and sold $2.33 billion against $1.75 billion and $1.70 billion offered and sold respectively in April. The increase in the month was 31.43 percent on the offer, 22.93 percent on the market demand and 36.37 percent on the volume sold. The volume sold in the month was higher than $1.754 billion sold in March; $1.95bn sold in February and $1.683 billion in January; and $388.47 million lesser than the corresponding figure in May 2009.

The foreign exchange management policy of the central bank was brought under close scrutiny and reliability test in the month as Dollar/Naira relationship peaked at N152.22/$ at the inter-bank market and recorded minor oscillation at the WDAS.The premium between CBN/inter-bank markets and the parallel market in the month was 2.87 percent and 1.09 percent, respectively, and year to date was 3.72 percent and 2.23 percent, respectively. The figures are less than the International Monetary Fund (IMF) benchmark of 5.00 percent.

Meanwhile following the release of N403.414 million to the three tiers of government by the Federation Accounts Allocation Committee (FAAC), inter-bank lending rates at the Nigerian Inter-Bank Offer Rate (NIBOR) slowed down reasonably.The call rate reduced by 0.83 points to 5.6667 percent, 7-day NIBOR went down to 0.8917 percent by 0.88 percent; and the 30-day NIBOR down to 7.5000 percent by 0.96 points.

The 60-day NIBOR reduced to 8.3583 percent by 0.70 percent and the 90-day NIBOR slowed to 8.8667 percent by 0.67 points.


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