- The foreign exchange market received $5.62 billion from the Central Bank of Nigeria
- Bureau de Change, as well as the investors and exporters window, recorded a rise in forex sale
- CBN says international reserves improved due to bank policy that encouraged diaspora remittances
The foreign exchange market in Nigeria received $5.62 billion from the Central Bank of Nigeria (CBN) in a bid to increase the availability of forex to meet the demand for business operation.
The $5.62 billion was disbursed into the forex market in the fourth quarter of 2020, an economic report released by the apex bank stated. The capital disbursed in Q4 last year surpassed the $4.37 billion offered in the preceding quarter.
However, the capital fell by 46.1% when compared to the corresponding period of 2019 when $9.98 billion was received by the foreign exchange market. During the period under review, the report stated that Bureau De Change (BDC), as well as Investors and exporters' window sales of forex, rose significantly.
BDC sales had risen to $1.36 billion in the fourth quarter of 2020, surpassing $340 million of Q3, while investors and exporters' window sales increased to $1.62 billion in Q4, against $390 million.
Also, interbank sales rose by 12.3% to hit $160 million, while Small and Medium Enterprise increased by 3.1% to climb $310 million. During the same period, secondary market intervention sales dropped to 12.8 to $1.71 billion, and the matured swap transactions declined by 62.9% to $460 million, when both are compared to their preceding quarter.
The CBN reported that international reserve improved during the period under review, hyping the bank's policy as reason for the improvement:
"As a result of the gradual return of economic activities to normalcy after the COVID-19 pandemic lockdown, as well as, the Bank’s policy to encourage diaspora remittance flows to the economy, foreign exchange inflows improved, leading to a marginal increase in external reserves during the review quarter.
"Consequently, Nigeria’s international reserve increased to US$36.46 billion at end-December 2020, from US$35.67 billion at end-September 2020. At this level, the external reserves position could cover 6.3 months of import for goods and services and 8.4 months of import for goods only."
Meanwhile, Legit.ng had reported that Airtel's mobile money business raised $200 million from US-based investment company, The Rise Fund. The capital will be split into two tranches.
The capital also improved the market value of the mobile money to $2.65 billion. The deal will see The Rise Fund take a minority stake in the Airtel subsidiary.
Fakoyejo Olalekan is a Business and Financial Journalist with over three years of experience in covering finance and business activities within Nigeria and offshore. Prior to joining Legit.ng, he worked at Nairametrics where he wrote financial and investment analysis articles. Olalekan is a resourceful and result-driven journalist with a track record for conducting extensive research and interviews to produce articles that provide different perspectives to market activities.