The Central Bank of Nigeria injected about $25.68bn to stabilise the nation’s currency in the foreign exchange market between January and August this year. The $25.68bn was arrived at by our correspondent based on analysis of the monthly economic report released by the Apex Bank.
The $25.68bn intervention is aimed at boosting liquidity in the foreign exchange market. The CBN usually intervenes in the foreign exchange market by injecting liquidity about three times a week. The intervention is provided to authorised dealers in the wholesale segment of the market, as well as other sectors of the economy such as agriculture, manufacturing and Small and Medium Enterprises segment.
Customers that require foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance, among others, are also allocated funds from the intervention. An analysis of the intervention showed that the apex bank injected about $3.56bn in January while February, March and April each had $3.35bn, $3.75bn and $2.43bn respectively.
The CBN intervention in the month of May was estimated at about $2.04bn, June $2.5bn while July and August had $3.46bn and $4.59bn. The report reads in part, “The bank continued to intervene in the foreign exchange market to further sustain improved liquidity and relative stability in the market.
“Thus, a cummulative sum of $4.59bn was sold by the bank to authorised dealers in August 2019, compared with $3.46bn supplied in July 2019. “This indicated an increase of 32.5 per cent and 18.5 per cent above the levels in the preceding month and the end of the corresponding period of 2018.”
The report stated that interbank sales rose by 67.7 per cent to $0.21bn, compared with the increase of 50.3 per cent in the preceding month. It said Bureau De Change sales rose by 1.3 per cent to $1.29bn in August, while swap transactions fell by 14.1 per cent to $0.34bn below the preceding month’s level of $0.4bn.
The CBN Governor, Mr Godwin Emefiele, said the management of the Apex Bank understood the importance of exchange rate stability for price and monetary stability as well as its ramifications for overall macroeconomic stability.