CBN: We injected $7.6bn into FX market in five months to stabilise naira

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 interventions, the naira depreciated by 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 decrease 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 decreased by 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 by 7.0 percent and 71.4 percent to $0.64 billion and $0.10 billion, respectively, compared to the amounts 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.

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

“The era is coming to an end 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.”