- Forex Intervention: CBN Injects $4.4b Into Fx Market in Two Months
In a bid to sustain dollar liquidity and stimulate growth, the Central Bank of Nigeria sold $4.47 billion in forex between April and May to dealers.
In the report released for the month of May, the CBN sold a total sum of $2.04 billion to forex dealers across the country, while $2.43 billion was injected in April, representing a decline of 16.1 percent and 42.3 percent lower than the corresponding period of 2018.
“The bank continued to intervene in the foreign exchange market to further sustain the improved liquidity and relative stability in the market,” the report read in part.
Sales to the interbank segment declined by 10 percent to $0.09 billion when compared to April sales.
However, sales to the BDC surged 6.3 percent to $1.05 billion during the same month. Swaps transaction was unchanged at $0.01 billion.
According to the CBN, the average Naira exchange rate was N306.95 per US dollar in May.
The report showed forex intervention remains the lifeline of the Naira and further highlights the danger of weak revenue if oil prices drop amid global trade wars and uncertainty.
Meanwhile, the Monetary Policy Committee is expected to leave the key interest rate unchanged at 13.5 percent on Tuesday as the CBN looks to stimulate growth and compel banks to increase credit facility to the private sector.