…preferred sectors got $313 against $814
The Central Bank of Nigeria (CBN) last night failed to meet the foreign exchange demand of its preferred sectors in a two-month forward auction as it met only $313 of the total demand of $814 million by Agric, airline and manufacturing sectors.
The two-month forward quote, under its special intervention programme was to clear part of the backlog dollar demand as currency crisis deepens, Business day gathered last night.
Traders said last night that the flexible intervention programme which was at the exchange rate of N310/$ was aimed at these sectors to as to re-energise the real sector that is suffering from dearth of forex but was far less than a total of $814million demanded by the three sectors.
Agric sector received the highest of 62 percent under the new foreign exchange management that had continued to increase frustrations of dealers who were looking forward to interventions of over $600 million to assuage the growing hunger and desperations.
Some analysts said last night that the action of CBN is suggestive of the return to the old method of the apex bank being the sole supplier of forex with the attendant pressure on the local currency.
“CBN should rather pursue policies that would promote and encourage investment inflows rather than these isolated cases of meeting demands and further encouraging uncertainties and frustrations in the market,” says a trader last night.
Explaining his frustration, another trader said, “CBN should rather than continue to struggle to share the little forex, concentrate on instituting proper market structure that would engender transparency and confidence in the management of forex.”
According to him, CBN’s action amount to abandoning failed policies in favour of further expanding controls with the attendant risks in adjustment of naira which has resulted in different rates in the market.
“CBN’s policy should aim at closing the gap between the different markets and aligning them gradually with the official rate,” he further said.
CBN said last week that within the next few months, it will fund the 60-day forward sales and request from the agricultural, aviation, machinery and raw materials sectors, thus guaranteeing letters of credit (LCs) for importers to ship in required goods.
Isaac Okorafor, acting Director, Corporate Communications Department, confirmed that the CBN would fund the requests from the various sectors in the secondary market interbank thereby giving a boost to the importation of required goods for the overall development of the economy.
Okorafor explained that importers in the agricultural sector would be getting the largest percentage allocation of 62 percent of their requests, while importers of machinery would receive 53 per cent of their requests. Other sectors to receive allotments are the airlines, which will have 32 percent of their request settled, as well as the importers of raw materials.
Isaac Okorafor, acting Director, Corporate Communications Department, confirmed that the CBN would fund the requests from the various sectors in the secondary market interbank thereby giving a boost to the importation of required goods for the overall development of the economy.
Okorafor explained that importers in the agricultural sector would be getting the largest percentage allocation of 62 percent of their requests, while importers of machinery would receive 53 per cent of their requests. Other sectors to receive allotments are the airlines, which will have 32 percent of their request settled, as well as the importers of raw materials.
