Nairametrics|The Central Bank of Nigeria (CBN) will this weekend release $350 million into the market, to meet demand for FX both by individuals and firms. So far about $570 million was sold last week by our records. About $600 million was sold the week before.
Despite this dollar “rain”, the exchange rate failed to drop below N400 and closed the week at about N470/$1, per Nairametrics parallel market exchange rate tracker.
Analysts who spoke to Nairametrics indicate that the challenge for the CBN still remains the supply factor. How long will it continue to supply the market with forex at an exchange rate that’s still trading at a huge discount to the parallel market rate. Currently, it sells to commercial banks at about N315 while the banks offload at a premium of 20% to that rate.
The CBN’s reported last week that commercial banks in the country sold about $1.7 billion based on its 60:40 rule in the month of January. It is likely that February figures might top $3 billion, if it is to reduce the pressure at the black market. Reports reaching us also suggest foreign investors are watching closely at the new forex policy with one eye at the rate disparity and the other at the CBN reserves.
One other closely watched metric is the volumes of crude oil supplied by Nigeria. The National Bureau of Statistics puts this figure at 1.833mb/day in 2016 compared to 2.13mb/day in 2015. At some point in 2016, Nigeria produced as low as 800kbpd. That was at the height of the Niger Delta bombings. With Buhari currently out of the picture and Osinbajo running the show, some Nigerians believe the acting President has for now done enough to quiet the boys at the creek. But how long with this tranquility last?