CBN Spends $581m On FX Interventions – FMDQ

The Central Bank of Nigeria (CBN) has so far spent $581 million on foreign exchange interventions at the Nigeria Autonomous Foreign Exchange Market this year, data from the FMDQ Securities Exchange has shown.

This is as the governor of the apex bank Dr Olayemi Cardoso said the CBN is not spending the country’s external reserves on defending the value of the naira. He stated this at the ongoing 2024 Spring Meetings of the International Monetary Fund and the World Bank in Washington DC on Wednesday

FMDQ data showed that the CBN has only sold $581 million in the official market, accounting for only 3.2 percent of the total market turnover of $17.938 billion in the same period.

The apex bank has also sold around $60 million to BDCs over the last two months since it resumed dollar sales to them this year. That’s yet more proof that the naira appreciation seen over the last month is not being driven by CBN interventions.

Current figures from the CBN, as of April 15, 2024, reveal that the FX reserves sat at $32.29 billion, a decline from $34.45 billion recorded on March 18, 2024. 

According to Cardoso, the decline in external reserves was due  to debt repayments. “What you see with respect to the shifts in our reserves is the shift you will find in any country’s reserve situation where for example debts are due and certain payments need to be made and they are made because that it also part of keeping your credibility intact.