The Central Bank of Nigeria yesterday continued its intervention in the foreign exchange segment of the financial market with the injection of fresh $220 million into the various sectors of the economy.
The CBN, in a statement issued by the Acting Director, Corporate Communications Department, Isaac Okorafor, said it had also commenced the weekly sale of $20,000 to Bureau de Change operators.
The statement said the CBN on Tuesday also opened bids where it offered $100m wholesale 7-45 days forwards to end-users through the deposit money banks (DMBs).
A breakdown of the intervention showed that Basic Travel Allowance, Personal Travel Allowance, medical bills and tuition received $80m, while the Small and Medium Enterprises window received $100m.
Okorafor said that the new window for SMEs would boost the operations of small businesses through the importation of eligible finished and semi-finished items.
This, he added, would boost forex supply to the retail business segment of the market.
Okorafor further explained that the CBN introduced the use of Form Q for the SMEs, to ease documentation challenges usually encountered by this category of businesses.
He explained that through this arrangement, SMEs are allowed to purchase $20,000 per quarter.
On the sale of forex to BDCs, the CBN said the decision was taken to ensure that the high volume of demand by low-end users is met promptly.
The apex bank urged market participants to abide by the rules to ensure the preservation of the country’s external reserves.
The statement warned that the CBN would not tolerate unscrupulous practices by banks or their staff.
With the latest CBN policy, experts say the apex bank seemed to have cut the amount of paperwork SMEs must provide to buy dollars, to improve liquidity and the ease of doing business and help narrow the gap between official and black market exchange rates.
Faced with a shortage of dollars and numerous requirements to fulfill when buying hard currency from the central bank, most small and medium-size enterprises (SMEs) use the black market instead, even though the naira currency is much weaker there.