CBN records $9.4 in forex sales within the period of the six months

By: Damian Okonkwo

The Central Bank of Nigeria (CBN) has reported the sales of foreign exchange (forex) worth $9.4 Billion within the first half of 2022.

The increase in the volume of sales was necessary to help stabilize the pressure on forex that so much devalued the Naira in the foreign exchange market.

According to the CBN's semestral report, the total sales made between January to June 2022 were up 2.34 percent year-on-year (yoy) when compared to the $5.8 billion sold the previous year.

The CBN sells forex at the market through two important means which includes Spot and forward sales.

The spot sales made by the CBN amounted to 47.5 percent of the total sales which is $4.38 Billion out of the total sales made. While the total forward sales made were worth $4.3 Billion

The breakdown of the sales showed that $2.07 Billion was sold via the Investors' and Exporters' Window (I&E), $856.81 million were invisible sales while the Small and Medium Enterprise recorded $834.74 million in sales. The total amount recorded at inter-bank Secondary Market Sales was $622.92 Million.

Apart from the total sales made, the CBN on its part purchased a total of $1.3 billion worth of forex from January to June 2022.

According to the report, the Bank purchased $1,325.43 Million of forex during the last six months which amounted to a net sale of $7,903.83 Million.

Amidst the increased rate of the CBN intervention in the forex market, the IMF had advised the apex bank to reduce its high involvement and interventions in the forex market and allow the commercial banks to set the exchange rate. This was contained in the concluding statement of article IV of the IMF 2022 Consultations following their official visit to the country.

This they believed, will help resolve the forex crisis at the market today and reduce the pressure mounted on forex resulting in the devaluation of the indigenous currency Naira.