CBN protects naira with $7.6bn in 5 months

Nigeria's central bank pumped $7.6 billion into the economy for five months to restore the naira's exchange rate stability.

This information was gleaned from monthly economic reports on changes in the foreign currency market published by the banking regulator.

CBN protects naira with $7.6bn in 5 months

Reports show that in January, February, and March, the CBN injected $1.65bn, $1.39bn, and $1.82bn into the markets, while in April and May, the CBN injected $1.56bn and $1.18bn.

According to the report, the bank sold $1.18 billion in foreign currency to authorized dealers, a 24.4% decline from the $1.56 billion sold in April.

Sales of foreign currency through the Investors and Exporters window fell by 39% from the previous month, while sales through the interbank/invisible window fell by 0.7%, to a total of $0.16bn.

There was a decrease across the board, with SMIS down 7% and matured swap contracts down 71.4% from April's totals to $0.64bn and $0.10bn, respectively. On the other hand, during the review period, foreign exchange sales through the Small and Medium Enterprises window increased by 8.4 percent to $0.12 bn.

On Thursday, the CBN kept the official exchange rate for the naira to the dollar at N427.76 at the I&E FX window on its website. However, the naira was traded in the parallel market between N690 and N700.

Earlier this year, CBN Governor Godwin Emefiele said that the central bank will no longer sell foreign currency to deposit money banks after 2022.

Before 2021, it had discontinued providing Bureau de Changes with foreign currency.

The CBN governor has unveiled a plan called the RT200 FX Programme, which aims to increase the country's supply of foreign currency from sources other than the oil industry during the next three to five years.

He stated that the CBN created the Bankers' Committee "RT200 FX Programme" after seriously considering the possibilities and consulting with the banking community.

Over the next three to five years, the government aims to bring in $200 billion in foreign exchange (FX) from sources other than oil exports under the RT200 FX Programme.

Five major pillars, according to Emefiele, are the value-adding exports facility, the non-oil commodities growth facility, the non-oil FX rebate scheme, the specialized non-oil export terminal, and the biennial non-oil export conference.

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