The Central Bank of Nigeria has hinged the recent recovery of the local currency against major foreign currencies on strategic policies implemented at the right time.
According to Acting Director of Corporate Communications, CBN, Isaac Okorafor, the naira’s recent appreciation was a result of calculated moves that were based on intelligence reports, as well as the need to effect the right policies at the appropriate time.
Substantiating his claims, he said that when CBN placed $500 million in the market last week, only $370 million was taken, which was the real demand and it also placed another $230 million, while only $221 million was taken.
He said that with forex reserves now at near $30 billion, the apex bank had decided to do the intervention as it is more comfortable, unlike the level it was before now, which didn’t allow the bank to feel comfortable enough to do a kind of intervention needed when required.
“The CBN has done a lot of intelligence on the markets and we came to the realisation that much of what was driving the demand in the bureaux de change and the parallel market was mere bubble and speculation.
“We reasoned that since there was pressure on those two segments from people seeking personal travel allowance, medicals and tuition if we successfully address that bit, the pressure would come down. We intervened in the market and the market reacted positively and the naira started gaining strength,” he said.