In the past fortnight, the Central Bank of Nigeria (CBN) has injected over $300 million into Deposit Money Banks (DMBs) in a bid to stabilize the naira-dollar exchange rate, according to a memo by the Association of Corporate Treasurers of Nigeria.
The memo revealed that the CBN sold over $200 million to banks last week at rates below N1,500 per dollar. Additionally, the CBN has reportedly sold FX to banks at rates around $1,450 on consecutive days this week. An anonymous executive committee member of the ACTN confirmed the authenticity of the memo, emphasizing its role in informing members amidst the naira’s significant depreciation.
The naira’s value has been under pressure, starting the year at N891/$ and experiencing continued depreciation in both official and parallel markets. However, the currency saw a brief appreciation against the dollar at the parallel market last Thursday and Friday after joint efforts by the CBN and the Economic and Financial Crimes Commission (EFCC) to curb currency speculation through raids on street currency traders in Abuja.
At the close of trading activities on Monday, the naira appreciated against the dollar to 1,582/$ in the official market, marking a 0.75% increase from the previous trading day. Meanwhile, at the black market, the naira slipped slightly to trade between N1,555/dollar and N1,560/dollar, influenced by market sentiment.
The local currency’s value fluctuated between N1,500/dollar and N1,900/dollar but rebounded to N1,500/dollar on Friday following EFCC raids on currency speculators. However, it depreciated slightly to N1,555/$ on Monday evening, as reported by street traders.
The rise in the naira’s value is attributed to market sentiment, bolstered by ongoing EFCC crackdowns on black market operators in Abuja and Lagos.
Source: PunchNG