CBN injects $7.6bn into FX market in 5 months to stabilise naira

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The Central Bank of Nigeria (CBN) says it injected $7.6 billion into the economy in five months through foreign exchange sales to authorised dealers.

The apex bank said this in its monthly economic reports for May 2022.

According to the report, CBN said it intervened in the FX markets to stabilise the value of the naira with $1.65 billion and $1.39 billion in January and February, respectively.

The apex bank added that it pumped $1.82 billion in March, $1.56 billion in April and $1.18 billion in May 2022.

Despite these interventions, the naira depreciated 0.7 percent to N415 a dollar in the official market within the period.

“Total foreign exchange sales to authorised dealers by the bank were $1.18 billion, a decline of 24.4 percent below $1.56 billion in April,” the report reads.

“A breakdown shows that foreign exchange sales at the Investors and Exporters and interbank/invisible windows dropped 37.9 per cent and 0.7 per cent to $0.16 billion percent, below their respective levels in the preceding month.

“Similarly, SMIS and matured swap contracts fell 7.0 percent and 71.4 percent to $0.64 billion and $0.10 billion, respectively, compared to the figure in April.

However, foreign exchange sales at the Small and Medium Enterprises window rose 8.4 percent to $0.12 billion in the review period.”

Last year, the Central Bank of Nigeria (CBN) stopped the sale of foreign exchange (FX) to Bureau De Change (BDCs) operators in the country and channelled weekly allocations of dollar sales to commercial banks to meet legitimate FX demands, after blaming the BDCs of fueling speculative transactions in the market.

Godwin Emefiele, governor of the CBN, had said the apex bank would stop sale of foreign exchange to banks by end of 2022.

“The era is coming when, because your customers need $100 million in foreign exchange or $200 million, you now want to pack all the dollars and pass it to CBN to give you dollars,” he had said. “It is coming to an end before or by the end of this year. We will tell them don’t come to the Central Bank for foreign exchange again and generate their export proceeds.




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