Nigeria’s foreign exchange supply, through the official window, has increased to $15.2 billion, representing a 17.7% rise from 2021 and a 46.4% increase from 2020, according to data from the Central Bank of Nigeria (CBN). The increase was primarily driven by the Investors and Exporters (I&E) window, which accounted for 100% of the total forex supply in the official window.
The official window comprises the Wholesale Dutch Auction System (WDAS)/Retail Dutch Auction System (RDAS), the Interbank market, the Bureau De Change (BDC) market, the Investors and Exporters (I&E) window, as well as the Small and Medium Enterprises (SME) and Invisibles segments.
The BDC market is a segment of the official window where licensed operators buy and sell forex to retail customers at a margin. However, in July 2021, the CBN stopped selling forex to BDC operators, accusing them of engaging in illegal activities such as hoarding, speculation, exploiting customers and money laundering.
The I&E window was introduced by the CBN to boost liquidity and transparency in the forex market. It allows foreign investors and exporters to buy and sell forex at market-determined rates, leaving the I&E window as the only source of forex supply through the official window.