The Central Bank of Nigeria has stated that net foreign exchange flows increased to $25.4 billion between January and June, showing a 55% year-over-year rise, demonstrating the results of its policy initiatives.
This was disclosed in a statement by the CBN on Wednesday, according to Nairametrics.
It further stated that the unprecedented inflows was driven by diaspora remittances through official channels and an increase in capital importation, which hit $6 billion in June 2024.
The statement noted “The CBN’s policy objectives are yielding tangible results and bolstering market confidence. Net foreign exchange flows rose to $25.4 billion between January and June, marking a 55% year-over-year increase. This growth has been driven by a rise in capital importation, which reached $6 billion in June 2024, and record inflows from diaspora remittances through formal channels.”
The CBN added that through a two-way quote system that has been used over the past few months to improve liquidity in the interbank market, over $305 million in foreign exchange has been sold to approved dealers in the last three weeks.
According to the statement, the CBN also made an offer of $876 million to match customer bids during an auction that ended on Wednesday, August 7, 2024.
This was done through the Retail Dutch Auction System (RDAS), which is designed to facilitate FX sales to end users directly, promoting a more transparent market, reducing information asymmetry, and aiding in price discovery.
The statement read: “In the latest testament to the Central Bank of Nigeria’s (CBN) ongoing commitment to support the proper functioning of the foreign exchange market by enhancing liquidity when necessary, the apex bank offered $876m to fulfil bids submitted by customers at an auction concluded on Wednesday, August 7, 2024.
“In line with its pledge to provide transparent access to foreign exchange for all legitimate customers, the CBN’s leadership has introduced an additional mechanism through the Retail Dutch Auction System (RDAS) to directly facilitate FX sales to end users.
“This approach aims to foster a more transparent market, reducing information asymmetry and supporting price discovery. It complements the two-way quote system deployed over the past few months to enhance liquidity in the interbank market, through which over $305 million of foreign exchange has been sold to authorised dealers in the last three weeks.”
The Central Bank of Nigeria sold $876.26 million at N1,495/$1 to 26 qualified banks in its latest Retail Dutch Auction.
This was disclosed in a statement signed by the Director, Financial Markets Department, Dr Omolara Omotunde Duke.
According to the statement from the CBN, a total bid of $1.18 billion was received from 32 dealer banks.
