The Central Bank has injected another US$50 million into the local foreign exchange market.
The latest boost into what has — at least anecdotally — been a very tight market since December, brings the Central Bank’s total supply of foreign exchange this year from January to May 9 thus far to US$410 million.
In a release last Friday, the Bank said it released this latest sale to authorised dealers “in anticipation of a seasonal decline of foreign exchange inflows and to alleviate immediate trade-related demand pressures in the economy”.
The Central Bank has provided just under one-fifth of the total foreign exchange market needs. The remaining 80 per cent came primarily from energy sector companies selling funds to the banking system, the bank said.
The domestic foreign exchange market remained relatively liquid in the first four months of 2014, the Bank said.
Authorised dealers purchased US$1.884 billion mainly from the energy sector and sold US$2.077 billion to the general public. The resulting market shortfall of US$193 million was completely met by the Central Bank’s sales of foreign exchange to the financial system, the Bank said.
The Central Bank will continue to assess market conditions and take further action, as it sees necessary, the release stated.