CBN Spends $3.36bn To Stabilize Naira

The Central Bank of Nigeria has in defence of Naira stability dolled out the sum of $3.36bn into the foreign exchange market.

The reported figure was injected in two months, the apex bank revealed in January monthly report on Foreign Exchange Market Developments.

The report showed that $1.71bn and $1.65bn were injected in December 2021 and January 2022 respectively.

In his narration about the Naira stability, the President of the Association of Bureau de Change Operators of Nigeria, Alhaji Aminu Gwadabe, said it was difficult for the naira to be strong because a lot of parameters were against it.

“Total foreign exchange sales to authorised dealers by the Bank was $1.65bn in January, representing a decrease of 3.1 per cent, relative to $1.71bn in December 2021.

“A breakdown shows that foreign exchange sales at the Small and Medium Enterprises window, interbank/invisible foreign exchange sales and matured swaps contracts rose by 24.4 per cent, 25.9 per cent, and 60.8 per cent to $0.14bn, $0.18bn and $0.21bn, respectively, in January, relative to the amount in December 2021,” the CBN monthly report noted.

It revealed further that foreign exchange sales to the Investors and Exporters and Secondary Market Intervention Sales windows fell by 13.7 per cent and 16.3 per cent to $0.58bn and $0.54bn, respectively, in the month under review.

The apex bank which stopped forex intervention through the Bureau de Change segment of the market in 2021, stressed in it latest report that it would stop further interventions through the banks by the end of 2022.

Experts have, however, decried the unprecedented rate of oil theft recorded in recent times and its debilitating impact on government revenue and accretion to the country’s external reserves, which are used to defend the naira value.

Meanwhile, Gwadabe had said that “Our balance of trade is in deficit, our balance of payments is insufficient, our export commodity is low, so tell me, which currency can be strong with these negative parameters? Is the reserve big to accommodate any shock? It is not?”

In his remark recent after a meeting with Banker’s Committee, the CBN Governor, Godwin Emefiele, said to boost forex supply in the country through the non-oil sector in the next three to five years, it had launched the ‘RT200 FX Programme’.

Emefiele said after careful consideration of the available options and wide consultation with the banking community, it launched the Bankers’ Committee RT200 FX Programme which stood for the “Race to $200bn in FX repatriation.

This article was originally published on Nigeria News