The Central Bank of Nigeria, CBN, in a bid to defend the naira, injected $2.1 billion into the Investors and Exporters (I&E) window, in the seven months to July this year.
This represents a 238 per cent increase when compared with the $621.1 million injected into the I&E window in the corresponding period of 2020 (7mths-2020).
Furthermore, the amount injected in 7mths-2021, represents a 47 per cent increase when compared with the $1.43 billion injected in the corresponding period in the pre-COVID year of 2019, (7mths-2019).
Findings from the CBN’s data on monthly intervention in the I&E window showed that the highest amount of $474.65 million was recorded in April while the lowest amount of $195.91 million was recorded in June.
As a result of the increased CBN intervention, the naira was relatively stable during the 7mths-2021 period.
However, the nation’s currency recorded a marginal depreciation of 0.3 per cent as the indicative exchange rate at the I&E window fell to N411.44 per dollar at the end of July from N410.25 at the end of December 2020.
Similarly, the naira last week depreciated by 0.37 per cent in the I&E window as the exchange rate rose to N415.94 per dollar on Friday from N414.4 per dollar the previous week.
The naira also depreciated last week by 5.7 per cent in the parallel market as the exchange rate rose to N565.50 per dollar from N535 per dollar the previous week.
Analysts at Cowry Assets Management Limited, projected that the naira will depreciate further following the continued decline in the nation’s external reserves.
“In the new week, we expect the Naira to weaken slightly against the USD as external reserves threaten to breach its current level of $41.33 billion”, they said.
The members of the Central Bank of Nigeria’s, CBN, Monetary Policy Committee, MPC, have called on the apex bank to carry out a comprehensive review of the foreign exchange market operations in the country to determine the fundamental drivers, and relative sizes of the segments of the market.
Net foreign exchange inflow falls 31% to $21.8bn