HABEEB ADAMU
Data obtained from the Central Bank of Nigeria (CBN) monthly report for January shows that it pumped a total of $3.36 billion into the foreign exchange market in the last two months in a bid to safeguard the stability of the naira.
An examination of the report on ‘Foreign Exchange Market Development’, revealed that the sum of $1.71 billion and $1.65 billion was pumped into the market in December 2021 and January 2022, respectively.
According to the CBN report, “Total foreign exchange sales to authorised dealers by the bank were $1.65 billion in January, which makes a decrease of 3.1 percent related to $1.71 billion in December 2021. A breakdown shows that foreign exchange sales at the Small and Medium Enterprises window, interbank/invisible foreign exchange sales and matured swaps contracts rose by 24.4 per cent, 25.9 percent, and 60.8 percent to $0.14 billion, $0.18 billion and $0.21 billion, respectively, in January, relative to the amount in December 2021.
“However foreign exchange sales to the Investors and Exporters and Secondary Market Intervention Sales windows fell by 13.7 percent and 16.3 percent to $0.58 billion and $0.54 billion, respectively, in the month under review,” the report stated.
However, forex intervention has been halted by CBN to the Bureau de Change (BDC) segment of the market since 2021 following the activities of round-tripping and racketeering in the market, which has prompted the apex bank to further announce its intentions to stop more interventions to the commercial banks at the end of 2022.
Consequently, the continued decline in the power of the local currency had also prompted several stakeholders concerned about the issue to call for immediate remedies by the monetary authorities and other players within the foreign exchange market to save the local currency, bridge the exchange rate gaps and curb volatility in the forex market.
Also, experts have condemned the unusual rate of oil theft recorded in recent times and its devastating impact on government revenue and accretion to the country’s external reserves, which are used to defend the naira value.
