The Central Bank of Nigeria (CBN) drew down Nigeria’s foreign reserves and expended $17.81billion to defend the nation’s weak currency, at the foreign exchange (forex) markets in 2022.
According to the apex bank in its Annual CBN Activity Report, in 2022, the amount it injected was 7.6 percent higher than the $16.55billion injected in 2021on intervention at the inter-bank forex market to stabilise the Naira.
This depleted the external reserves from $40.53 billion as of December 31, 2021, to $34.22 billion as of June 26, 2023. Giving details of the intervention, the report explains that $7.12 billion was distributed and sold at the spot market while the sum of $10.69 billion was sold and distributed at the forwards market.
Further breakdown showed that the spot sales comprised $2.46billion at the Investors and Exporters (I & E) window otherwise called the Nigerian Autonomous Foreign Exchange, NAFEX, market.
A total of $1.43 billion was sold and distributed at the inter-bank; $1.60 billion for small and medium enterprises (SMEs); and $1.63 billion for invisibles. However, the apex bank purchased a total of $2.17 billion at the inter-bank market, indicating net sales of US$15.64 billion.
