Weak Naira: CBN Sells $543.5m To Boost FX Market

The Central Bank of Nigeria (CBN) has announced that it sold a total sum of $543.5 million to authorised dealer banks between 6 – 30 September 2024.

According to a statement by CBN’s Director, Financial Market Department, Omolara Duke, released on Friday, this was done through FX Spot sales conducted in 11 days within the month of September.

According to the statement, the largest single-day sales was $80 million on 26 September 2024 at the rate of between N1,570.00/$ and N1,580.00/$. This was followed by $79 million on 27 September at the rate of N1,530.00/$ to N1,580.00/$. The least was on 23 September when it sold $17.5 million to 10 authorised dealer banks at the rate of N1,540.00/$.

Giving reasons for the FX Spot sales, the CBN said it was to reduce market volatility driven by high demand for importation of commodities and seasonal FX demands. “The value dates for all the transactions were T+2,” it added.

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The apex bank explained that publishing details of the FX transactions was to enlighten the general public on the pricing of FX “by taking a cue from the range of rates at which FX was sold by the CBN to authorised dealer banks.”

The CBN assured that it would continue to boost the supply of FX to the Nigeria Foreign Exchange Market “as part of its holistic FX management strategy.”

The foreign exchange market in Nigeria has continued to experience volatility since the beginning of this year with the exchange rate fluctuating on daily basis.

Experts believe that increasing dollar supply to the FX market would help in stabilizing the value of the naira which has continued to depreciate. Within last week, the naira dollar exchange rate oscillated between N1,540/$ and N1,631/$ at the official market and between N1,690/$ and N1,670/$.