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Central Bank injects $5.62 billion into Nigerian forex market in Q4 2020

Felix Oloyede

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Central Bank injects $5.62 billion into Nigerian forex market in Q4 2020

The Central Bank of Nigeria (CBN) sold $5.62 billion to dealers as part of its intervention in the country’s foreign exchange in the fourth quarter of 2020.

The Q4 2020 economic report the CBN published showed that it injected 28.7% more forex into the market when compared with $4.37 billion it sold in the previous quarter, lower by 46.1% compared to $9.98 billion recorded in Q4 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.

The forex allocated to 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.

The apex has intervened in the forex market with a sum of $62.16 billion, recording the highest in Q1 2020 ($13.38 billion) before the spread of the COVID pandemic.