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CBN spends $11.24 billion to stabilize the Naira in 7 months

In a move to intervene in the country’s foreign exchange market, the Central Bank of Nigeria, CBN has spent the sum of $11.24 billion from January to July 2022, to ensure the stability of the Naira.

Central Bank of Nigeria

This was disclosed in the CBN’s monthly economic reports on foreign exchange market developments. The report revealed that in the first five months of the year - from January to May 2022 - the sum of $7.6 billion was used to stabilize the naira.

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In the months of January, February and March, the CBN revealed it had spent $1.65 billion, $1.39 billion and $1.82 billion respectively to stabilize the naira. In the months of April and May, the apex bank also claimed it had spent the sum of $1.56 billion and $1.18 billion respectively.

The apex bank has over the years, introduced policies in its bid to strengthen the Naira. In 2018, the CBN and the Chinese government signed a three-year bilateral currency swap agreement of $2.5 billion, equivalent to ¥15.0 billion or N720 billion with the Peoples Bank of China.

This was aimed at reducing the pressure on foreign exchange demand and also, facilitate investment between both countries. Earlier this year, the apex bank also introduced the Bankers’ Committee “RT200 FX Programme”- Race to US$200 billion in FX Repatriation.

The RT200 FX Programme is a set of policies, plans and programmes targeted at non-oil exports that will enable the country to attain the goal of repatriating US$200 billion exclusively from non-oil exports over the next 3-5 years.

With Nigeria being an import-dependent country, the CBN has constantly been intervening in the forex market, a development which is aimed at curbing the high demand for dollars by manufacturers and businessmen to import machinery and buy finished products.

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