Renewed attention has been turned on the Central Bank of Nigeria over its ability to fulfill the $3.5 billion forwards contract executed on the first trading under the flexible exchange rate regime.
Besides, as the one-month forwards component of the $3.5 billion, estimated at about $697 million nears redemption date, stakeholders have said its success will serve as confidence booster to the new system and an attraction for investors.
The forwards contract also included an estimated $1.22 billion for two months and $1.57 billion due in three months, in order to clear a backlog of $4.02 billion of demand.
Despite the apex bank’s daily interventions at the interbank foreign exchange market since the new system started, the country’s reserves have remained stable at $26.3 billion for the last one month.
Analysts at Afrinvest Securities Limited said: “We believe that the ability of the CBN to fulfil the $3.5 billion forward commitments in June will massively boost confidence levels in the Nigerian foreign exchange (forex) market.”
Last week, the parallel market had remained quiet as the Naira was stable, trading at N352.00/US$1.00 on all days of the week.
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