November 24, 2022
  • November 24, 2022

In two months, CBN defends Naira with $3.36 billion

By on May 27, 2022 0


The Central Bank of Nigeria injected $3.36 billion into the foreign exchange market in two months as part of efforts to ensure the stability of the naira.

Figures obtained from the CBN’s January monthly report on “foreign exchange market developments” showed that $1.71 billion and $1.65 billion were injected in December 2021 and January 2022 respectively.

The report states, “Total FX sales to Bank-approved brokers were $1.65 billion in January, down 3.1% from $1.71 billion in December 2021.

“A breakdown shows that small and medium business over-the-counter currency sales, interbank/invisible currency sales and maturing swap contracts increased by 24.4%, 25.9% and 60.8% for reach $0.14 billion, $0.18 billion and $0.21 billion, respectively, in January, compared to the amount of December 2021.

“However, foreign exchange sales to investors and exporters and at counters of secondary market intervention sales fell 13.7% and 16.3% to $0.58 billion and $0.54 billion. , respectively, during the month under review.”

The CBN ended interventions in the foreign exchange market through the Bureau de Change segment of the market in 2021 and said it would end further interventions through banks by the end of 2022.

Experts, however, have denounced the unprecedented rate of oil thefts recorded in recent times and its debilitating impact on government revenue and the country’s growing external reserves, which are used to defend the value of the naira.
Chairman of the Association of Bureau de Change Operators of Nigeria, Alhaji Aminu Gwadabe, said it was difficult for the naira to be strong as there were many parameters against it.

He said: “Our trade balance is in deficit, our balance of payments is insufficient, our export commodity is weak, so tell me, what currency can be strong with these negative parameters? Is the reserve large enough to accommodate a shock? It’s not?”

CBN Governor Godwin Emefiele after a meeting with the bankers committee recently said that to boost the supply of foreign exchange in the country through the non-oil sector over the next three to five years, he had launched the “RT200 FX program”.