CBN: We injected $7.6 billion into the foreign exchange market in five months to stabilize the naira

The Central Bank of Nigeria (CBN) claims to have injected $7.6 billion into the economy in five months through sales of currencies to authorized dealers.

The apex bank said so in its May 2022 monthly economic reports.

According to the report, CBN said it intervened in the foreign exchange markets to stabilize the value of the naira with $1.65 billion and $1.39 billion in January and February, respectively.

The apex bank added that it injected $1.82 billion in March, $1.56 billion in April and $1.18 billion in May 2022.

Despite the interventions, the naira depreciated by 0.7% to 415 naira per dollar in official market in the period.

“Total currency sales to bank-authorized dealers were $1.18 billion, down 24.4% from $1.56 billion in April,” the report said.

“A breakdown shows that foreign exchange sales to investors and exporters and interbank/invisible tellers fell 37.9% and 0.7% to $0.16 billion, below their respective levels the previous month.

“Similarly, SMIS and maturing swap contracts fell 7.0% and 71.4% to $0.64 billion and $0.10 billion, respectively, from April amounts. However, foreign exchange over-the-counter sales of small and medium-sized businesses increased 8.4% to $0.12 billion during the reporting period.

Last year, the Central Bank of Nigeria (CBN) stopped selling foreign exchange (FX) to currency exchange (BDC) operators in the country and channeled weekly allocations of dollar sales to commercial banks to meet legitimate demands for foreign exchange.

Godwin Emefiele, Governor of the CBN, had said the apex bank would stop selling foreign currency to banks by the end of the year.

“The era is coming to an end where because your clients need $100 million in currency or $200 million, now you want to wrap up all the dollars and pass them to CBN to give you dollars,” had -he declares.

“It ends before or by the end of this year. We will tell them not to come to the Central Bank anymore to get foreign exchange and generate their export earnings.

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