CBN sells $5.6bn FX to dealers — 28.7% higher than Q3 intervention

The Central Bank of Nigeria (CBN) says it intervened in the foreign exchange (FX) market with sales valued at $5.62 billion in the fourth quarter (Q4) of 2020.

This is an increase of 28.7 per cent from $4.37 billion intervention in the economy by the apex bank in the third quarter.

CBN, in its latest Q4 2020 economic report, said the value decreased by 46.1 per cent compared to $9.98 billion recorded in the corresponding period of 2019.

According to the banking regulator, the increase was largely attributed to the increased interventions in the Bureau de Change (BDC) and import and export (I&E) windows during the quarter, while the year-on-year decline can be attributed to the decline in export earnings due to the crash in global oil prices.

“Further disaggregation showed that BDC sales and I&E sales rose to US$1.36 billion and US$1.62 billion from US$0.34 billion and US$0.39 billion, respectively, in the preceding quarter,” the report said.

“Interbank sales and SME intervention increased by 12.2 per cent and 3.1 per cent to US$0.16 billion and US$0.31 billion, respectively, from the levels in the preceding quarter.

“The Secondary market Intervention Sales (SMIS) and matured swap transactions, however, fell by 12.8 per cent and 62.9 per cent to US$1.71 billion and US$0.46 billion, relative to the levels in the preceding quarter.”

CBN said foreign exchange inflow into the economy improved, following the bank’s policy directive of November 30, 2020 directing transfer of all diaspora remittances to the domiciliary accounts of the beneficiaries or payment of customers in foreign currency, as well as the closure of all Naira ledger accounts opened specifically for the purpose of receiving IMTO (foreign transfers from diaspora Nigerians) with immediate effect.

The apex bank had suspended sales of foreign exchange to operators of BDCs in March 2020 after the Association of Bureau de Change Operators of Nigeria (ABCON) requested a two-week break as part of measures to curb the spread of coronavirus.

It, however, resumed sales of FX to BDCs following the reopening of airports and global ease on the restriction of movements.