The Central Bank of Nigeria has made an important step towards stabilizing the foreign exchange market by selling $122.67 million to 46 authorized dealers.
This measure is intended to promote market stability and reduce volatility, since the exchange rate closed on Thursday at N1,554.65/$1, its lowest level since March 2024, according to Nairametric.
This is according to a statement signed by the CBN’s Director of Financial Markets, Dr Omolara Duke.
The statement read “The Central Bank of Nigeria (CBN) has sold the sum of US$122,671,000.00 (One Hundred and Twenty-Two Million, Six Hundred and Seventy-One Thousand United States Dollars) to 46 authorised dealers in its determination to promote stability and reduce market volatility in the foreign exchange market.”
According to the statement, the sales occurred on Wednesday and Thursday this week.
On Wednesday, the apex bank sold $67.5 million to 27 approved dealers and purchased $2.5 million from one. The bid range for these trades was N1,480/$1 to N1,500/$1. Payments for these transactions are scheduled for July 12, 2024, based on a two-day settlement period (T+2).
On Thursday, the CBN sold $55.17 million to 19 authorized dealers at a rate of N1,540.0 per dollar. On this particular date, no foreign exchange was purchased. The payments for these spot sales are due July 15, 2024.
The CBN also advised all authorized dealers to ensure that their foreign exchange purchases from the bank are only used for trade-backed transactions, which must be recorded within 72 hours.
According to the statement, the CBN supplies foreign exchange to the market through FX spot sales to approved dealers utilizing two-way quotes to improve liquidity.
FX turnover on the official market increased by 25.78% on Wednesday, reaching $236.7 million from $188.19 million the previous day.
The increase was more evident on Thursday when it rose by 47.37% to $348.82 million.
These CBN sales come as the currency rate recently burst through the N1,500 barrier towards N1,600.
