By Adedapo Adesanya
The Central Bank of Nigeria (CBN) sold $17.81 billion in its interventions at the interbank foreign exchange market in a bid to ease demand pressure and promote exchange rate stability in the country in the year 2022.
This is according to figures in its Financial Markets Department Annual Activity for 2022, which showed that the CBN’s intervention at the interbank comprised spot sales of $7.11 billion and forward sales of $10.69 billion.
Within the spot sales, the apex bank facilitated $2.46 billion at the Nigerian Autonomous Foreign Exchange (NAFEX) window, $1.42 billion at the inter-bank market, $1.59 billion for Small and Medium Enterprises (SMEs), and $1.62 billion for invisibles.
Additionally, CBN purchased $2.17 billion in the interbank market, resulting in net sales of $15.64 billion. Comparatively, in 2021, total sales amounted to $16.55 billion, including spot sales of $8.82 billion and forward sales of $7.73 billion. A total of $1.69 billion had been purchased in 2021, resulting in a net sale of $14.81 billion.
Also, $13.53 billion matured in the forward segment, while $8.31 billion remained outstanding at the end of December 2022.
According to the report, the increase in foreign exchange purchases in 2022 was primarily attributed to heightened acquisitions from International Oil Companies (IOCs), reflecting their contribution to the overall volume.
At the Naira-Settled Over-the-Counter (OTC) Foreign Exchange Futures market, trading reached $4.17 billion, with $5.38 billion maturing and $4.29 billion remaining outstanding at the end of December 2022. Comparatively, $6.87 billion was traded in 2021, with $20.45 billion maturing and $5.33 billion outstanding.
Meanwhile, the report showed that in line with the Bi-lateral Currency Swap Agreement (BCSA) with the People’s Bank of China, the CBN sustained fortnightly auctions of the Chinese yuan (CNY) at the Retail Secondary Market Intervention Sales (SMIS) window.
In the course of 2022, CNY2.67 billion (Chinese Yuan) was sold in 26 auctions, slightly lower than the previous year’s figure of CNY3.31 billion. The total sales under the BCSA from inception to end December 2022 reached CNY8.45 billion.
