FOREX: CBN offers $100m for wholesale auction

The Central Bank of Nigeria (CBN) on Thursday offered $100 million to authorized dealers at the foreign exchange (forex) auction in the interbank wholesale window just as Moody’s Investors Service expressed optimism that the Federal Government would easily achieve its target of $3.5 billion foreign borrowing this year as improved oil output is expected to rejuvenate the economy

According to the apex bank’s spokesman, Isaac Okorafor, while confirming the offer in Abuja, no interventions were made in the retail auction window for forex.

He added that the apex bank also made special intervention of $10,000 to dealers in the Bureau de Change (BDC) segment on Thursday, adding that CBN’s interventions in the different segments had ensured stability in the market and guaranteed availability to individuals and business concerns.

Recall that the apex bank had earlier promised to make a special intervention in the BDC segment of the market on Thursday, saying the special intervention would meet the upsurge in the forex requests of low-end customers, which has been on the sudden rise recently. The special intervention, besides the earlier one disbursed on Tuesday, made it a total of $20,000 per week to each member.

Moody’s Vice President and senior analytical adviser for Africa, Aurelien Mali, said “the international financial institutions are ready to support Nigeria as long as it is project-based lending. The funding will be available from lenders such as the African Development Bank, and the budget support from the World Bank will come on top of that.”

The Federal Government has been negotiating $1.25 billion in budget support from the World Bank and expects to get the remaining $400 million of a $1 billion credit facility from the African Development Bank, Mali said. It can raise the rest from bilateral and multilateral partners and also from lenders through commercial loans and or even a sukuk bond, he said.

Moody’s rates Nigeria’s debt at B1, four levels below investment grade. Last month, S&P Global Ratings kept its assessment of the nation’s credit at one step lower than Moody’s.

The International Monetary Fund (IMF) said Wednesday that Nigeria would probably raise debt through more Eurobond sales this year, in addition $500 million placed last month as part of the 2016 budget and $1 billion raised in February.

Nigeria expects at least $1 billion in loans from the World Bank this year, according to Ben Akabueze, the director-general of nationís budget office. The World Bank is in talks with the government and other development partners on the most appropriate financing instrument to support the countryís economic plan, the lender said in an emailed response to questions.

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