We learn from the CBN’s Economic Report Third Quarter 2019 that its fx inflows in the period amounted to US$11.69bn, and its outflows US$15.30bn. Sales to authorized dealers accounted for US$10.11bn of the outflows. They lubricate the various windows and mechanisms within the heterodox exchange-rate regime. The largest beneficiaries in Q3 were again the bureaux de change (BdC). The governor, Godwin Emefiele, is on record as having said that no other central bank draws upon its reserves to fund BdC.
The I&E window (NAFEX) was the second largest beneficiary, reflecting the fact that foreign portfolio investors (FPIs) were in selling mode. In Q2, in contrast, they tended to be in buying mode, so the CBN was able to accumulate reserves rather than draw upon them to supply the window.
Sales for swaps amounted to US$490m in the quarter and would appear to have peaked. A series on inflows and outflows on swaps is available in the CBN’s separate Quarterly Statistical Bulletin. The latest (Q2) edition shows swap inflows of US$250m and outflows of US$340m. The data compensate in part for the exclusion of swaps from the series covering gross reserves. The series also gives no colour on wholesale forward transactions, the fourth largest destination of the CBN’s fx sales in Q3.
Secondary market intervention sales (SMIS) are the CBN’s regular sales to the banks for their on-sale to different categories of end-user such as importers and retail (for their travel, education, health and other permitted allowances).