Central Bank of Nigeria (CBN) releases $250m forex for agric, other sectors


Central Bank of Nigeria is a financially capable institution that has worked hard over the years to moderate the country’s financial activities. The Central Bank of Nigeria (CBN) was established by the CBN Act of 1958 and commenced operations on July 1, 1959. The major regulatory objectives of the bank as stated in the CBN Act are to: maintain the external reserves of the country, promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government. The central bank’s role as lender of last resort and adviser to the federal government has sometimes pushed it into murky regulatory waters.

After the end of imperial rule the desire of the government to become pro-active in the development of the economy became visible especially after the end of the Nigerian civil war, the bank followed the government’s desire and took a determined effort to supplement any short falls in credit allocations to the real sector. The bank soon became involved in lending directly to consumers, contravening its original intention to work through commercial banks in activities involving consumer lending. However, the policy was an offspring of the indigenisation policy at the time. Nevertheless, the government through the central bank has been actively involved in building the nation’s money and equity centers, forming securities regulatory board and introducing treasury instruments into the capital market.

Recently, the Central Bank of Nigeria  released additional $250m on seven to 30 day forwards for agriculture, airline, petroleum products and raw materials. The apex bank also called for bids for wholesale spot for $100m for Basic/Personal Traveling Allowance, medicals and tuition fees.

Confirming this in Abuja, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said in a statement issued on Wednesday night that the apex bank has also commenced heavy injections into the spot market. He added that the settlement of requests for wholesale spot bids for invisibles like school fees, medicals and personal travel allowance. The CBN had earlier this week, disbursed $20,000 each to the Bureau De Change  operators in two tranches of $10,000 each. According to Mr. Okorafor, the commitment of the CBN has ensured liquidity in the foreign exchange market.

Just of recent, CBN also injected fresh $350m into interbank market. The Central Bank of Nigeria is set to pump more United States dollars into the foreign exchange market this weekend, in continuation of its strategy to further strengthen the value of the naira. A source at the apex bank told our correspondent on condition of anonymity that the CBN was set to release an additional $350m into the forex market.

The exchange rate in Nigeria seems to be dropping. The Central Bank Of Nigeria is working really hard to make exchange rate bearable for the Nigerian citizens. However, the Bank’s involvement in assisting the country in agriculture, airline, petroleum products and raw materials will go a long way in uplifting the people from recession and at the same time, enhancing growth and development.

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