The Central Bank of Nigeria(CBN), last year, sold $17.81 billion in its interventions at the inter-bank foreign exchange market in a bid to ease demand pressure and promote exchange rate stability in the country.
This is according to figures in its Financial Markets Department Annual Activity for 2022.
Demand pressure at the official market had extended to the black market where the value of the naira had depreciated to near N900 last year, despite the official rate hovering around N450 to the dollar.
CBN’s interventions at the interbank end of the foreign exchange market had resulted in total sales of $17.81 billion which comprised spot sales of $7.11 billion and forward sales of $10.69 billion.
Within the spot sales, the apex bank facilitated $2.46 billion at the Nigerian Autonomous Foreign Exchange (NAFEX) window, $1.42 billion at the inter-bank market, $1.59 billion for Small and Medium Enterprises (SMEs), and $1.62 billion for invisibles.
Additionally, CBN purchased $2.17 billion in the inter-bank market, resulting in net sales of $15.64 billion. In 2021, total sales had amounted to $16.55 billion, including spot sales of $8.82 billion and forward sales of $7.73 billion. A total of $1.69 billion had been purchased in 2021 resulting in a net sale of $14.81 billion.
Also, $13.53 billion matured at the forwards segment, while $8.31 billion remained outstanding at the end of December 2022.
According to the report, the increase in foreign exchange purchases in 2022 was primarily attributed to heightened acquisitions from International Oil Companies (IOCs), reflecting their contribution to the overall volume.
At the Naira-Settled Over-the-Counter Foreign Exchange Futures market, trading reached $4.17 billion, with $5.38 billion maturing and $4.29 billion remaining outstanding at the end of December 2022. Comparatively, $6.87 billion was traded in 2021, with $20.45 billion maturing and $5.33 billion outstanding.
Meanwhile, in line with the Bi-lateral Currency Swap Agreement (BCSA) with the People’s Bank of China, the CBN sustained fortnightly auctions of the Chinese yuan (CNY) at the Retail Secondary Market Intervention Sales (SMIS) window.
In the course of 2022, CNY2,673.84 million was sold in 26 auctions, slightly lower than the previous year’s figure of CNY3,310.60 million. The total sales under the BCSA from inception to end-December 2022 reached CNY8,453.90 million.
Last modified: July 18, 2023
