CBN Sells $122.67 Million to Stabilize Foreign Exchange Market
By Patience Ikpeme
In a decisive move to bolster stability and reduce volatility in the foreign exchange market, the Central Bank of Nigeria (CBN) has announced the sale of US$122,671,000.00 to 46 authorized dealers.
This measure, aimed at ensuring liquidity and fostering confidence in the market, was detailed in a statement issued by Dr. Omolara Duke, Director of Financial Markets at the CBN.
According to Dr. Duke, the sales were divided over two days: on July 10, 2024, a total of US$70 million was transacted. Specifically, US$67.5 million was sold to 27 authorized dealers, with an additional US$2.5 million purchased from one dealer. The exchange rate for these transactions ranged between N1,480.0/US$ and N1,500.0/US$. The value date for the payments, following the T+2 settlement cycle, is set for July 12, 2024.
On the following day July 11, 2024, the CBN sold US$55,171,000 to 19 authorized dealers at a rate of N1,540.0/US$. No foreign exchange was purchased on this day. The value date for these transactions is July 15, 2024.
In her statement, Dr. Duke noted the importance of the proper use of the foreign exchange provided by the CBN. Authorized dealers are required to utilize the foreign exchange for trade-backed transactions exclusively. Furthermore, these transactions must be reported within 72 hours to ensure transparency and compliance.
The CBN reassured the public of its ongoing commitment to maintaining stability in the foreign exchange market. By supplying foreign exchange through spot sales and employing a two-way quote system, the CBN aims to enhance liquidity and mitigate fluctuations in the market.
Dr. Duke reiterated that the CBN will continue its vigilant monitoring of the market and will take necessary actions to support its stability. This recent sale is part of a broader strategy to ensure a robust and reliable foreign exchange market, essential for the country’s economic stability.
