CBN Injects $9.96bn Into FX
Posted On Aug 28, 2017
The Central Bank of Nigeria (CBN) has injected $9.964 billion into the interbank segment of the foreign exchange (forex) market since it commenced its aggressive interventions in February this year.
This has helped to ease pressure on Nigeria’s forex market, which prior to the action by the regulator had been pummelled by speculators.
According to figures compiled by THISDAY between February 21 and August 21, the CBN sold the greenback to authorised dealers in 44 sessions.
A breakdown of the dollar sales showed that $680 million was pumped into the market in February, $1.542 billion was sold in March, $1.616 billion in April, $2.102 billion in May, and $1.631 billion in June.
Also, while the central bank offered $1.639 billion to banks to sell to their customers in July, as of August 21, it had sold a total of $754 million.
The $2.102 billion sold by the central bank in May remains the highest in the six months under review.
In May, the central bank sold dollars in eight different sessions, in its bid to stabilise the market and discourage currency speculation.
The dollar sales have been targeted at retail invisibles for PTA, BTA, school fees and medical bills, wholesale forwards, SMEs, and Secondary Market Intervention Sales (SMIS).
A market analyst who spoke to THISDAY said the forays by the central bank in the past six months have helped in eliminating the pressure on the forex market, ensured exchange rate stability and eliminated currency speculators.
The aggressive interventions, notwithstanding, Nigeria’s external reserves also climbed by $2.271 billion to $31.599 billion as of August 18, compared to $29.328 billion when the new forex policy was unveiled.
Owing to this measure, the naira which fell to a historic low of N525/$ on the parallel market six months ago currently trades around N365 to the dollar.
At the official market, the naira closed last week at N305.80 to the dollar due to daily interventions by the CBN, while at the Investors and Exporters’ forex window, the naira appreciated on all trading days last week, rising 0.4 per cent to and close at N359.25 last Friday.