CBN intervenes in FOREX market with $5.62 billion in Q4 2020, up by 28.7%

The Central Bank of Nigeria has intervened in the foreign exchange market with sales of FOREX to dealers valued at $5.62 billion in the fourth quarter of 2020. This was disclosed in the Q4 2020 economic report published by the Apex bank.

In the period under review, FOREX sales increased by 28.7% compared to $4.37 billion recorded in the previous quarter, while it decreased by 46.1% compared to $9.98 billion recorded in the corresponding period of 2019.

According to the report, the increase was largely attributed to the increased interventions in the BDC and I&E windows during the quarter. Meanwhile, the year-on-year decline can be attributed to the decline in export earnings due to the crash in global oil prices.

Further disaggregation showed that BDC sales and I&E sales rose to $1.36 billion and $1.62 billion from $340 million and $390 million, recorded respectively, in the preceding quarter.

Similarly, Interbank sales and SME intervention increased by 12.2% and 3.1% to $160 million and $310 million, respectively, from the levels recorded in Q3 2020. The Secondary market Intervention Sales (SMIS) and matured swap transactions, however, fell by 12.8% and 62.9% to $1.71 billion and $460 million, compared to the previous quarter.

A cursory look at the data obtained from the CBN showed that the apex has intervened in the Nigeria Foreign Exchange market with a sum of $62.16 billion, recording the highest in Q1 2020 ($13.38 billion) before the spread of the covid pandemic.

The Apex bank had suspended the sales of foreign exchange to operators of Bureau de Change in March 2020 after the Association of Bureau de Change Operators of Nigeria (ABCON) requested that a market holiday be declared on its members’ weekly bidding.

CBN however, resumed sales of FOREX to Bureau De Change later in August 2020, which was attributed to the limited resumption of international travel in the country. The Association of Bureau de Change Operators of Nigeria (ABCON) has vowed to however continue to defend the naira through regulatory compliance and constantly supporting the CBN in achieving a stable exchange rate.

Reports that the forex turnover in the Investors and Exporters window increased by 359.4% on Wednesday 17th March 2021 to stand at $148.54 million compared to $32.33 million recorded in the previous day.