CBN Sells $5.2bn Forex in October

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The Central Bank of Nigeria in its efforts to ensure foreign exchange stability said it sold $5.27 billion in October as the real sector credit to the domestic economy stood at N25.97 trillion.

The value of the naira last week got a hit as the currency slid alongside the price of cure oil at the international market, prompting the CBN to increase its dollar sales to meet demand.

Bureau de Change operators which were getting $20,000 three times a week will from this week get an additional $15,000 bringing the total dollar each of the over 1,000 BDC operators can get to $75,000 per week.

The CBN in its Economic Report for the month of October put foreign exchange inflow into and outflow from the bank in October 2018 at $4.18 billion and $5.27 billion, respectively resulting in a net outflow of $1.09 billion.

CBN in the report said aggregate foreign exchange inflow into and outflow from the economy were $8.82 billion and $5.56 billion, respectively, resulting in a net inflow of $3.26 billion. Foreign exchange sales by the CBN to the authorised dealers amounted to $4.26 billion, in the review period, compared with $4.05 billion in the preceding month.

Meanwhile, credit to the domestic economy rose by 5.2 per cent to N25.97 trillion as at the end of September 2018, in contrast to the decline of 3.2 per cent at the end of the preceding month. The development reflected the 53.6 per cent and 0.4 per cent increase in net claims on the Federal Government and the private sector, respectively.

Over the level at end-December 2017, net domestic credit grew by 0.2 per cent at end-September 2018, in contrast to the decline of 4.8 per cent at end-August 2018, owing, wholly, to the 1.2 per cent growth in claims on the private sector.

Net claims on the Federal Government rose by 53.6 per cent to N3.41 trillion at end-September 2018, in contrast to the 3.2 per cent decline at the end of the preceding month.

This reflected the rise in holdings of government securities by banks. Over the level at end-December 2017, net claims on the Federal Government fell by 6.3 per cent at end-September 2018, compared with the decline of 39.0 per cent at end-August 2018.

The development was attributed to the 74.3 per cent and 12.3 per cent decline in loans to the Federal Government by the CBN and banks, respectively.

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