CBN: sells $148m to ease naira

The Central  Bank of Nigeria CBN executive sales of $148 million to authorized dealers enhancing marketing liquidity.

According to a statement on Friday, the transactions, conducted on July 22 and 23, 2024, aim to provide much-needed stability in the FX market. 

The statement noted that Mrs. Hakama Sidi Ali, the Acting Director of the Corporate Communications Department at the CBN, made this announcement in Abuja. 

She highlighted the transparency of the CBN’s operations, revealing 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. 

Mrs. Sidi Ali also specified that the value dates for all transactions conducted on July 22 and 23, 2024, were T+0 and T+1 for sales made later in the day. 

What the statement all about

The statement from the CBN read:

“The Central Bank of Nigeria (CBN) sold a cumulative amount of US$148,000,000.00 (One Hundred and Forty-Eight Million United States Dollars) to Authorised Dealers in the Nigerian Foreign Exchange Market (NFEM) to provide liquidity to the  Fx market. The transactions were conducted on July 22 and 23, 2024. 

“Revealing this in Abuja on Friday, July 26, 2024, the Acting Director of the Corporate Communications Department, Mrs. Hakama Sidi Ali, underscored the transparency of the CBN’s operations. She disclosed that the CBN sold foreign exchange (FX) to 29 Authorized Dealer banks at exchange rates between N1470.00/US$1 and   N1510.00/US$1.  

Mrs. Sidi Alli also stated that the value dates for all transactions conducted on July 22 and 23, 2024, were T+0 and T+1 for sales at the later part of each day.” 

The statement noted that the apex bank would continue to address the supply gap to ensure market stability. 

Timeline of forex interventions 

The latest sale is the third to authorized FX dealers this month as the CBN tries to boost liquidity in the FX market. 

Just last week, the CBN announced the sale of $106.5 million as foreign exchange (FX) to 29 FX dealer banks. 

• In a statement signed by Dr Omolara Omotunde Duke, Director, Financial Markets Department, it was disclosed that on July 18 and 19, 2024, the CBN sold $106.5 million to 29 authorized dealer banks at exchange rates ranging from N1,498/$1 to N1,530.00/$1 and bought $9.5 million from four authorized dealer banks at rates between N1,510/$1 and N1,550/$1.  
• The central bank also stated that it had sold $122.67 million to 46 authorized dealers two weeks ago.
• The CBN also announced the approval of the sales of FX to eligible BDCs to meet the demand for invisible transactions in a decisive step to strengthen the naira on Thursday, July 18, 2024.
• The bank announced that the sum of $20,000 is to be sold to each BDC at the rate of N1,450/$1. This rate represents the lower band of the trading rate at the NAFEM from the previous trading day.   

These sales from the CBN come at a time when the exchange rate has broken through the N1,600 ceiling amid rising demand pressure.