CBN spends $2.2bn in June to defend naira

THERE are indications that the Central Bank of Nigeria’s Foreign Exchange (FX) intervention to the various segments of the market to defend Naira against depreciation rose 20.2 per cent when compared month by month to $2.2 billion.

This in addition to its decision to increase its frequency of dollar sales to the Bureau De Changes (BDCs) from 2 to 3 times per week which  strained liquidity from the market.

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Analysts from Financial Derivatives Company(FDC) observed that  the market in June also witnessed flashes of selloffs from banks as they unwind ahead of half year (H1)18 financial reporting. Based on the foregoing, average stop rates at the June Nigeria Treasury Bills (NTB) auction (June: +17bps to 10.6%) tracked higher despite lower paper issuances (-20% to N40 billion in June).

It will be recalled that the CBN had recently ordered banks not to deny genuine travelers Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) as there are enough dollar supplies to meet the demand. This was followed by the CBN Governor, Mr. Godwin Emefiele leading Bank Examiners to conduct on-the-spot assessment of forex sales in the DMBs on Monday, May 28, 2018.