Why we injected $7.6bn into FX market in five months – CBN

The Central Bank of Nigeria (CBN) has confirmed it injected $7.6 billion into the economy in five months through foreign exchange sales to authorised dealers.

The apex bank, which made the disclosure in its monthly economic reports for May 2022,
said the intervention in the FX markets was to stabilise the value of the naira with $1.65 billion and $1.39 billion in January and February, respectively.

The bank further stated that it pumped $1.82 billion in March, $1.56 billion in April, and $1.18 billion in May 2022.

However, despite the bank’s best efforts, the naira depreciated by 0.7 percent to N415 a dollar in the official market within the period.

“Total foreign exchange sales to authorised dealers by the bank were $1.18 billion, a decrease of 24.4 percent below $1.56 billion in April,” the report reads.

“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 $0.16 billion percent, below their respective levels in the preceding month.

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

The Central Bank of Nigeria (CBN) in 2021,  stopped the sale of foreign exchange (FX) to Bureau De Change (BDCs) operators in the country and channelled weekly allocations of dollar sales to commercial banks to meet legitimate FX demands.