CBN defends Naira with $11.24bn in seven months

The Central Bank of Nigeria (CBN) in the first seven months of 2022, defended the value of the naira by selling $11.24 billion forex to Nigerians and exporters.

This was revealed in the banking regulator’s monthly economic reports on foreign exchange market developments.

The CBN has been intervening in the foreign exchange market to stabilise the economy and respond to a growing demand in the market.

According to the report, CBN spent $7.6 billion to stabilize the naira in the year’s first five months.

It stated, “Total foreign exchange sales to authorised dealers by the Bank were $1.75bn in July, a decrease of 15.4 per cent relative to $2.07bn in June.

A breakdown shows that foreign exchange sales at the interbank/invisible window and matured swaps decreased by 22.0 per cent and 59.1 per cent, respectively, to $0.13bn and $0.27bn, below their respective levels in the preceding month.

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“In contrast, FX sales at Investors and Exporters, Secondary Market Intervention Sales and Small and Medium Enterprises windows rose by 5.8 per cent, 0.6 per cent and 65.7 per cent, respectively, to $0.44bn, $0.72bn, and $0.19bn, compared to their levels in June.”

In an earlier report, the CBN said it had intervened in the markets with $1.65bn, $1.39bn and $1.82bn in January, February and March, while the interventions were $1.56bn and $1.18bn in April and May respectively.

The report read, “Total foreign exchange sales to authorised dealers by the bank were $1.18bn, a decrease of 24.4 per cent, below $1.56bn in April.

“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 $0.16bn apiece, below their respective levels in the preceding month.

“Similarly, SMIS and matured swap contracts fell by 7.0 per cent and 71.4 per cent to $0.64bn and $0.10bn, respectively, compared to the amounts in April. However, foreign exchange sales at the Small and Medium Enterprises window rose by 8.4 per cent to $0.12bn in the review period.”