FX: CBN sells $10bn to defend Naira in fourth quarter of 2019

The apex bank in the country has said it sold the total sum of US$9.98 billion to authorised currencies dealers in the fourth quarter of 2019.

The Central Bank of Nigeria  revealed this in its economic report, said the sum represents 0.4 per cent decrease when compared with the level in the third quarter of 2019.

The development, relative to the preceding quarter, reflected, mainly, the decline in foreign exchange 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, Inter-bank, Swaps, Secondary Market Intervention Sales (SMIS) Intervention and Wholesale Forward Intervention fell by 11.2 per cent, 10.1 per cent, 8.0 per cent, 3.5 per cent and 2.3 per cent to US$0.40 billion, US$1.65 billion, US$1.24 billion, US$0.31 and US$3.34 billion, respectively.

Sales to BDC operators was $3.34 billion in the last three months in 2019, $0.20 billion less than previous quarter in the same year.

It thus accounted for 33.5% of the total sum rendered in the quarter, followed by supply to Investors and Exporters windows.

The CBN revealed that sales to the I&E window and SME intervention, rose above their levels in the preceding quarter by 17.7 per cent and 1.0 per cent to US$2.62 billion and US$0.43 billion, respectively.

According to the Nigeria’s lender of last resort, foreign exchange forwards disbursed at maturity recorded no transaction during the period under review.

The report reads that 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 Inter-bank segment, was N306.95/US$.

This represents 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/US$, but appreciated by 0.8 per cent relative to the corresponding period of 2018.

Similarly, at N362.83/US$, the average exchange rate at the “Investors” and “Exporters” (I&E) 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.

CBN said in the report that 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, the CBN revealed.

FX: CBN sells $10bn to defend Naira in fourth quarter of 2019

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