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Foreign exchange transaction (spot sales) by the Central Bank of Nigeria (CBN) rose by 62.34 percent to a total of $25.7 billion in 2018 from $15.8 billion in the preceding year.
The spot sales comprised $3.4 billion at the inter-bank, $1.6 billion for invisibles, $1.3 billion for Small and Medium Enterprise (SMEs) and $8.3 billion at the Investors’ and Exporters’ (I&E) window.
On the other hand, the CBN purchased a total of $7.8 billion at the inter-bank market in 2018, which was 27.9 percent lower than $6.1 billion purchased in 2017.
The CBN’s annual activity report for 2018 released on Tuesday indicated that net sales by the bank amounted to $17.9 billion in the year under review compared with $9.7 billion in the previous year of 2017.
In 2018, the CBN maintained its direct intervention in the inter-bank foreign exchange market to cushion demand pressure and ensure exchange rate stability.
Meanwhile, forwards sales amounted to $11.1 billion in 2018 as against $11.2 billion in 2017. The sum of $10.4 billion matured at the forwards segment, while $2.8 billion remained outstanding at the end of December 2018.
This show a decline as the sum of $10.7 billion matured at the forwards, while $1.9 billion remained outstanding at the end of December 2017.
The increased volume of transactions in 2018 was attributable largely to the bank’s foreign exchange policy and its management, coupled with the improvement in the levels of foreign reserves during the year.
“Nigeria’s foreign exchange policies are not popular with devotees of the free market (if such exists) but should be viewed in context. The country’s voracious appetite for imports has contributed to placing FX related policies on the FGN’s front burner,” said analysts at FBNQuest.
According to a report by FBNQuest, turnover at the … Read More...