The Central Bank of Nigeria (CBN) says the turnover of transactions at the import and export (I&E) window in half-year 2020 (H1 2020) reduced by $8.52 billion at $24.69 billion compared with $33.21 billion in half-year 2019 (H1 2019).
The apex bank in its “2020 Half -Year Activity Report”, said the decrease in turnover was a result of reduced inflows to the country during the period.
The I&E window is the market trading segment for investors, exporters and end users that allows for FX trades to be made at exchange rates determined based on prevailing market circumstances.
The restriction on international air travel saw the CBN temporarily stop sales to BDCs, which led to a depreciation of the naira at the segment.
The CBN noted that since the introduction of the window in April 2017, the turnover of transactions amounted to $173.41 billion at end-June 2020.
According to the CBN, in H1 2020, it continued with its intervention in the inter-bank foreign exchange market to cushion demand pressures and ensure exchange rate stability.
Consequently, a total of $10.3 billion was sold at the foreign exchange market. This comprised $5.05 billion at the I & E window, $1.19 billion at the inter-bank spot, $570.00 million for Small Medium Enterprises(SMEs,) $312.00 million for invisibles, while forwards sales were $3,170.97 million.
In comparison with H1 2019, a total of $8.47 billion was sold at the foreign exchange market. This comprised $2.16 billion at the inter-bank spot, $810.00 million for SMEs, $550.70 million for invisibles, $294.59 million at the I & E window, while forwards sales were $4.65 billion.
“The Bank purchased a total of US$2,210.63 million, which resulted in a net sale of US$8,097.37 million. The sum of US$5,425.30 million matured at the forwards segment, while US$2,504.62 million was outstanding at end-June 2020,” the report said.
“The Bank continued with the implementation of the Bilateral Currency Swap Agreement with the People’s Bank of China through fortnightly Renminbi auctions, which commenced in July 2018.
“In the review period, 13 auctions were conducted and Renminbi worth CNY294.09 million was sold from the drawdown of CNY1.00 billion. In the corresponding period of 2019, Renminbi worth CNY483.18 million, from the drawdown of CNY1.00 billion, was also sold in 13 auctions. CNY1.74 billion has been sold from inception to end-June 2020.”
According to the report, at the daily Bureau De Change, rate opened at N362.00/$ in January 2020 and closed at N455.00/$ at end-June 2020. On monthly basis, the average exchange rate opened at N367.00/$ in January and closed at N447.57/$ in June 2020.
“The restriction on international air travel saw the CBN temporarily stop sales to BDCs, which led to a depreciation of the naira at the segment. The continuous demand at this segment, despite restrictions on air travel during the period was speculative.”