CBN injects $14.2bn into FX market in nine months

The Central Bank of Nigeria (CBN) has injected a total of $14.184 billion into the interbank segment of the foreign exchange (FX) market since it started its forays into the market in February this year, figures compiled by THISDAY have shown. 

This is just as the naira has been projected to appreciate against the U.S. dollar in the coming days following the anticipated inflow from the $3 billion Eurobond that was recently issued by the government as well as additional $2.5 billion borrowing plan that has been approved by the Senate to support the funding of the budget. 

According to weekly FX sales by the central bank between February 21 and November 30, compiled by THISDAY, the CBN sold the greenback to authorised dealers in 60 sessions. 

A breakdown of the dollar sales showed that $680 million was pumped into the market in February, $1.542 billion was sold in March, $1.616 billion in April, $2.102 billion in May, and $1.631 billion in June. Also, while the central bank offered $1.639 billion to banks to sell to their customers in July, in August, it sold a total of $1.051 billion. Additionally, the central bank offered $1.548 billion in September, $1.567 billion in October, and $810 million in November. 

The $2.102 billion sold by the central bank in May remained the highest in the nine months under review. The dollar sales have been targeted at retail invisible for PTA, BTA, school fees and medical bills, wholesale forwards, SMEs, and Secondary Market Intervention Sales (SMIS). 

A market analyst said the interventions by the central bank have helped in eliminating the pressure on the forex market, ensured exchange rate stability and eliminated currency speculators. The naira exchange rate has remained stable in the past few months, exchanging at around N360 to a dollar in almost all the FX market segments. Besides the push by the CBN, analysts reckon that the influx of forex from Nigerians abroad, especially during the yuletide season, is expected to strengthen the naira as demand for the currency has been largely met by the banks and other dealers in the market. 

(ThisDay)