The Central Bank of Nigeria (CBN) recently undertook significant interventions in the Foreign Exchange (FX) market by selling a total of $148 million to Authorized Dealers. These transactions occurred on July 22 and 23, 2024, aiming to bolster liquidity and stabilize the FX market. Mrs. Hakama Sidi Ali, Acting Director of the Corporate Communications Department at CBN, disclosed this development in Abuja, emphasizing the transparency of the operations.
Transparent Transactions and Exchange Rates
In the statement, Mrs. Sidi Ali highlighted that the foreign exchange was sold to 29 Authorized Dealer banks at exchange rates ranging between N1,470.00/$1 and N1,510.00/$1. The value dates for the transactions conducted on July 22 and 23 were specified as T+0 and T+1 for sales made later in the day, ensuring prompt processing.
Continued CBN Commitment and Interventions
The CBN reiterated its commitment to bridging the supply gap in the FX market to ensure stability. This $148 million transaction marks the third intervention by the apex bank this month, following previous sales to authorized FX dealers. The recent efforts align with CBN’s strategy to enhance liquidity and strengthen the naira amidst growing demand pressures.
Previous Interventions and BDC Support
In earlier interventions, the CBN sold $106.5 million to 29 FX dealer banks, with exchange rates ranging from N1,498/$1 to N1,530.00/$1. Moreover, the central bank had sold $122.67 million to 46 authorized dealers in another initiative. Additionally, the approval of FX sales to eligible Bureau de Change (BDC) operators for invisible transactions was announced to further support the naira. Each BDC was allocated $20,000 at the rate of N1,450/$1, reflecting efforts to stabilize the exchange rate.
Naira Resilience Against Demand Pressure
The CBN’s proactive stance in selling foreign exchange to authorized dealers and BDCs comes at a pivotal time when the naira faces increasing demand pressure, leading to a breach of the N1,600 threshold in the exchange rate. These concerted interventions underscore the central bank’s commitment to maintaining stability and liquidity in the FX market amid economic fluctuations.