The efforts of the Central Bank of Nigeria (CBN) aimed at ensuring stability in the foreign exchange market may have started yielding results as the market is now awash with liquidity surfeit.
Indications of excessive liquidity in the market emerged on Thursday last week when operators could only pick a little over $39 million out of the $100 million offered for bid by the apex bank.
According to market analysts, with this development, the Naira is set to firm up against major currencies like the Dollar and pound sterling during the week.
It will be recalled that the Central Bank of Nigeria last week opened a special window for to enable Small and Medium Enterprises (SMEs) to access forex for the importation of eligible finished and semi-finished items not exceeding $20,000 for an enterprise per quarter.
That was in addition to the special intervention in the Bureau De Change (BDC) segment of the foreign exchange market which resulted in each operator accessing $20,000 as against the earlier stipulated $10,000 per week.
Isaac Okorafor, the CBN spokesman explained that the Bank’s special interventions were necessitated by its findings that a large number of SMEs were being crowded out of the forex space by large firms and also service genuine demand for invincible like tuition fees, medical a and personal/basic travel allowance.