Following the continuous decline in the value of the Naira at the foreign exchange market, the Central Bank of Nigeria will meet with Forex dealers and representatives of Deposit Money Banks to consider ways of preventing further depreciation of the currency.
A circular issued by the CBN on Sunday stated that the meeting, which will hold in Lagos on Thursday, would address recent developments in the market.
The circular read in part, “This is to inform all authorised dealers, destination inspection and pre-shipment inspection scheme service providers that the foreign exchange officers’ meeting has been scheduled to hold in Lagos
“The meeting shall afford participants the opportunity to deliberate on the recent developments in the forex market. Please, note that representation of banks at the meeting should be by officers who are conversant with international trade and treasury operations.”
Investigations by our correspondent revealed that the CBN had been selling unspecified amount of dollars at the inter-bank market to help support the local currency and also to calm the market.
According to latest figures on the CBN website, the nation’s external reserves have been declining gradually since June 6, 2012.
The reserves stood at $37. 77bn as at June 6, but dropped to $37.14bn by June 21, indicating that the reserves fell by $630m in 15 days.
Reliable sources at the Wholesale Dutch Auction System told our correspondent that there were signs that the apex bank would rely more on the forex reserves to defend the naira if the decline in the local currency continued.
A currency dealer, who preferred not to be mentioned said, “In the absence of any external dollar inflow, the CBN will have to lean on the external reserves to defend the naira. We have seen signs of this recently, as the apex bank has increased its dollar supply at the WDAS to support the naira.”
The CBN, in a bid to reduce the pressure in the foreign exchange market, recently increased its dollar sales to $400m at its bi-weekly auction from $300m.
Source:NBF
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