Nigeria’s currency on Wednesday steadied across foreign exchange markets as liquidity improves.
The daily foreign exchange market turnover rose by 359.44 percent to $148.54 million from $32.33 million recorded on Tuesday, data from the FMDQ indicated.
At the black market and Bureau De Change (BDC) segment of the foreign exchange market, naira remained unchanged at N485 per dollar.
The local currency also steadied at N409.75k to the dollar at the Investors and Exporters (I&E) forex window on Wednesday.
Currency traders who participated in the trading on Wednesday maintained bids at between N394.00k and N412.00k/$.
The Central Bank of Nigeria (CBN) maintained its periodic interventions in the foreign exchange market to boost liquidity, enhance access to foreign exchange, curb unbridled demand and ensure stable exchange rate.
During the fourth quarter of 2020, total foreign exchange sales to authorised dealers by the CBN stood at US$5.62 billion, an increase of 28.7 percent above the level in the preceding quarter, according to the CBN’s economic report for the fourth quarter of 2020.
This was attributed, largely, to the increased interventions in the BDC and I&E windows during the quarter. The total foreign exchange sales, however, saw a decrease of 46.1 per cent below the level in the corresponding quarter of 2019.
Further disaggregation showed that BDC sales and I&E sales rose to US$1.36 billion and US$1.62 billion from US$0.34 billion and US$0.39 billion, respectively, in the preceding quarter.
Similarly, Interbank sales and Small and Medium Enterprise (SME) intervention increased by 12.2 per cent and 3.1 per cent to US$0.16 billion and US$0.31 billion, respectively, from the levels in the preceding quarter.
The Secondary market Intervention Sales (SMIS) and matured swap transactions, however, fell by 12.8 per cent and 62.9 per cent to US$1.71 billion and US$0.46 billion, relative to the levels in the preceding quarter.
Provisional data on the sectoral foreign exchange utilisation in the fourth quarter of 2020 showed an increase of 74.6 per cent above the level in the preceding quarter to US$6.68 billion. Of this, visible and invisible imports rose by 68.8 and 82.8 per cent to US$3.75 billion and US$2.93 billion, constituting 56.1 and 43.9 per cent of the total foreign exchange utilisation, respectively.
A disaggregation of foreign exchange utilisation for visible transactions showed that the amount utilised for industrial sector, manufactured products, food products, oil, transport, agricultural and mineral sub-sectors were US$1.72 billion, US$0.80 billion, US$0.67 billion, US$0.31 billion, US$0.13 billion, US$0.07 billion and US$0.04 billion, respectively.
Further analysis of the foreign exchange utilisation under the invisibles component showed that financial services was US$2.52 billion (37.8 per cent of the total); business services, US$0.17 billion (2.5 per cent); educational services, US$0.09 billion (1.4 per cent); other services not included elsewhere, US$0.05 billion (0.8 per cent); and transport services, US$0.04 billion (0.7 per cent).
Furthermore, communication services was US$45.80 million (0.7 per cent), while health related and social services gulped US$0.32 million (0.01 per cent).
