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Economy: Why naira is appreciating in forex market – CBN

By The Citizen
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The Central Bank of Nigeria (CBN) said the recent appreciation of the Naira against other currencies was the result of its market monitoring and intervention.

The acting Director, Corporate Communications of the CBN, Mr Isaac Okoroafor on Thursday in Sokoto, refuted the claim that illegal sales of foreign currencies at ridiculous rates was responsible for the change in Forex policy.

Okoroafor also explained that appreciation of the Naira was in no way connected to the allegations of illegal sale of foreign currencies.

'I want to state categorically that there is no relationship whatsoever between the allegations that dollar was being sold at 61 kobo and the current appreciation of the Naira.

'What led to the appreciation of the Naira was that the CBN did an intelligent work on the market and realised that what was driving the demand on the Bureau De Change (BDCs) and parallel market was speculation.

'We reasoned that since there is a lot of pressure on the two segments from people seeking to buy foreign currencies for BTA, tuition and medicals, that if we successfully address that, the pressure will come down.

'Also, before now, the level of our reserves was not enough to make us comfortable enough to really do the kind of intervention that is required.

'We decided to do so now because we are a bit more comfortable with our level of reserve,' he said.

Okoroafor said that since the new Forex policy, the CBN had intervened with about 591 million dollars in the market, which had led to Naira gaining strength.

'Let me also state as proof that when we placed 500 million dollars in the market, only 370 million dollars was taken.

'That tells you that the real demand is 370 million dollars. When we placed 230 million dollars in the market, only 221 million dollars was taken.

'Anybody who has gone foul of the law and the security agencies have caught up with him, should go and face his or her case and stop causing confusion among participants in the market,' he said