The premium between the average inter-bank and bureau de change rates widened by 0.8 percentage points in the fourth quarter
By Anayo Ezugwu
AS part of its intervention in the foreign exchange market, the Central bank of Nigeria, CBN, sold a total of $9.18 billion to authorised dealers in the fourth quarter of 2018. This amount represented 16.1 percent decline below the level in the third quarter of 2018, but was 80.6 percent above the level in the corresponding period of 2017.
In its fourth quarter 2018 economic report, CBN said the development, relative to the preceding quarter reflected the decline in inter-bank sales and swaps transactions in the review quarter. Of the total, the report stated that foreign exchange forwards disbursed at maturity was $3.15 billion (34.3 percent); sales to Bureaux De Changes, BDC, $2.98 billion (32.5 percent); Investors’ and Exporters’ window, $2.09 billion (22.8 percent); interbank sales, $0.82 billion (8.7 percent); and swaps transactions, $0.13 billion (1.5 percent).
The CBN sustained its interventions at both the inter-bank and the BDC segments of the foreign exchange market in the review quarter. However, the average exchange rate of the naira vis-à-vis the US dollar at the inter-bank segment depreciated by 0.2 percent to N306.70/US$, relative to the level at end-September 2018.
Similarly, the report said that at the BDC segment, the average exchange rate, depreciated by 0.9 percent and 0.01 percent below the levels in the preceding quarter and corresponding period of 2017 to N362.42/US$. At the Investors’ and Exporters’ window segment, the average exchange rate stood at N364.27/US$, representing 0.5 percent and 1.0 percent depreciation relative to the levels in the preceding quarter and the corresponding period of 2017, respectively.
“Consequently, the premium between the average inter-bank and BDC rates widened by 0.8 percentage points in the review quarter, from 18.2 percentage points at the end of the fourth quarter of 2018, but the spread between the average exchange rates at the Investors’ and Exporters’ window and the BDC segment narrowed further to 0.5 percent, from 0.9 percent at the end of the preceding quarter.
“Gross external reserves were US$42.54 billion at the end of December 2018. This indicated a decline of 0.2 percent below the level in the third quarter of 2018. The external reserves position would cover 6.3 months of import of goods and services or 10.1 months of import of goods only, based on the estimated value of import for the fourth quarter of 2018.
“A breakdown of the official external reserves by ownership showed that CBN reserves stood at US$35.27 billion (82.9 percent), federal government reserves, US$6.79 billion (16.0 percent) and the federation reserves, US$0.48 billion (1.1 percent).”
– Feb. 8, 2019 @ 12:55 GMT |