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CBN defended Naira with $11.5bn forex in Q1

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The Central Bank of Nigeria (CBN) injected $11.5 billion foreign exchange (Forex) into the economy in the first three months of 2020 to boost the capacity of the local currency, naira.

Latest figures from the CBN on the supply of forex showed that $2.96 billion, $3.39 billion and $4.7 billion were injected into the market in January, February and March respectively.

The investors’ and exporters’, small and medium enterprises and invisible segments got a total of $7.23 billion; the Bureau De Change segment was funded $3.6 billion, while the interbank and WDAS/RDAS got the rest.

The latest statistics also showed that a total of $14.72 billion was injected into the market in 2018 while $28.55 billion was injected in 2019.

Recall that due to the COVID-19 pandemic which led to the introduction of lockdown in the country in April, the bank suspended sales of forex to the market.

It, however, commenced partial sales in May to all commercial banks to cater for parents and the SMEs making essential imports needed to revamp economic activities across the country.

The CBN said it had resumed the provision of over $100 million per week for school fees and the SMEs to adequately meet eligible demands from customers.

Commercial banks that were receiving supplies also said they were giving qualified SMEs the opportunity to bid for forex.

Meanwhile, Isaac Okorafor, the Director, Corporate Communications, CBN, had said, “The CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels and other designated retail uses, as soon as international flights resume.”

He stated that the market continued to enjoy stability, owing to the regular interventions by the bank, which he said had also guaranteed a stable exchange rate for the naira.

Okorafor said the bank remained committed to ensuring that all the sectors of the forex market continued to have access to the needed foreign exchange.

At the moment however, the dwindling forex base in the country is raising concerned particularly for financial banks, who now face between $3.6 billion and $5 billion servicing deficit, according to a recent report by Moody’s.

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