CBN Sells $300m to Access, UBA, Zenith, Others, to Boost Naira Value
The Central Bank of Nigeria (CBN) continues its efforts to bolster the naira’s value against the US dollar across both official and unofficial markets. One of its recent strategies involves selling dollars to Nigerian banks, aimed at enhancing liquidity in the official exchange markets. This proactive approach has yielded notable results, with the naira experiencing a significant recovery in recent days within the forex markets.
Over the past two weeks, the CBN has injected over $300 million into Nigerian banks, as disclosed by the Association of Corporate Treasurers of Nigeria. This move is part of the CBN’s broader initiative to stabilize the naira’s value in the foreign exchange markets. Notably, recent sales of dollars by the CBN to banks have occurred at rates below N1,500 per dollar, providing relief amidst soaring exchange rates.
Reports indicate that these dollar sales were prompted by the rapid depreciation of the naira in preceding weeks. However, the CBN’s interventions appear to be yielding positive outcomes, as evidenced by the recent appreciation of the naira in both official and unofficial markets.
Data from FMDQ reveals that on Monday, February 26, 2024, the naira appreciated against the dollar to 1,582/$ at the close of trading on the Nigerian Autonomous Foreign Exchange Market (NAFEM). This marks a noteworthy N12 or 0.75% increase compared to the previous trading day.
Similar trends were observed in other markets. In the peer-to-peer market, the naira strengthened by N62 against the dollar, reaching N1,643/$1. Meanwhile, in the black market, the naira saw a substantial gain of N180 against the dollar, closing at N1,520/$1.
Additionally, the CBN has taken measures to mop up excess liquidity from banks through Open Market Operations, aiming to mitigate inflationary pressures and curb naira depreciation. These concerted efforts underscore the CBN’s commitment to finding sustainable solutions for Nigeria’s economic challenges, as evidenced by the release of various guidelines in this regard.
