Between January and July 2022, the Central Bank of Nigeria (CBN) spent a total of $11.42 billion to maintain exchange rate stability at the authorized currency windows, an increase of +6.23% from $10.75 billion during the same period in 2021.
The naira has fallen to a record low at the parallel market as a result of this year’s significant dollar appreciation.
In the first quarter (Q1) 2022, the CBN spent $4.86 billion, while in the second quarter (Q2), it spent only $4.81 billion.
The total amount of foreign exchange sold during this time has been declining, with a monthly fall of 15.4% to $1.750 billion in July from $2.07 billion in June.
However, the I&E (Investors and Exporters), SMIS (Secondary Market Intervention Sales), and SME (Small and Medium Enterprises) windows saw increases of 5.8%, 0.6%, and 65.7% to $0.44 billion, $0.72 billion, and $0.19 billion, respectively, in July.
It further demonstrated that despite stopping FX sales to Bureaux De Change in July 2021, the CBN action had reduced foreign reserves to $37.12 billion from $40 billion in 2021.
As the naira’s depreciation has recently been worse, analysts anticipate that the forex sales for the remaining months will be greater, with N444.62 at the NAFEX fixing and N445.30 at the I&E fixings as of November 30, 2022, compared to N418.45 and N419.50 as of June 30, 2022.
