CBN Injected $9.98bn Into Forex Market Last Quarter Of 2019

A total of $9.98 billion was sold to authorised foreign exchange dealers by the Central bank of Nigeria (CBN) in the fourth quarter of 2019 according to a data from the central bank’s economic report for the fourth quarter of 2019. The data, which is available the CBN website also showed that the amount represents a decline by 0.4 per cent compared with the $10.020 billion recorded in the third quarter of 2019.

The development was attributed mainly, to the decline in forex sales to the Bureau De Change (BDCS), interbank, swaps transactions and wholesale forwards in the review quarter. Of the total, foreign exchange sales to BDCs, interbank, swaps, secondary market intervention sales (SMIS) intervention and wholesale forward intervention also fell by 11.2 per cent, 10.1 per cent, eight per cent, 3.5 per cent and 2.3 per cent to $0.40 billion, $1.65 billion, $1.24 billion, $0.31 and $3.34 billion respectively.

According to the data, “The CBN sustained its interventions at both the Inter-bank and the BDC segments of the foreign exchange market in the review quarter. Consequently, average exchange rate of the naira vis-à-vis the US dollar at the interbank segment, was N306.95/$, representing a depreciation of 0.01 per cent and 0.08 per cent in the preceding quarter and the corresponding period of 2018, respectively.

“Also, at the BDC segment, the average exchange rate, depreciated by 0.08 per cent relative to the level in the preceding quarter to N359.42/$, but appreciated by 0.8 per cent relative to the corresponding period of 2018. Similarly, at N362.83/$, the average exchange rate at the Investors and Exporters’ window depreciated by 0.2 per cent, relative to the level in the preceding quarter, but appreciated by 0.4 per cent, compared with the level in the corresponding period of 2018.

“Consequently, the premium between the average inter-bank and BDC rates widened by 0.1 percentage point to 17.1 per cent, relative to the level in the preceding quarter. The premium between the average exchange rates at the Investors and Exporters’ window and the BDC segment also widened by 0.11 percentage point to 0.96 per cent in the review quarter, from 0.85 per cent at the end of the third quarter of 2019.”

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