CBN Sells $122.67m to 46 Authorised FX Dealers to Stabilise Market

The Central Bank of Nigeria (CBN) has taken a significant step to stabilise the foreign exchange market by selling $122.67 million to 46 authorised dealers.

This move is aimed at promoting market stability and reducing volatility as the exchange rate closed at N1,554.65/$1 on Thursday, the lowest level since March 2024.

This is according to a statement signed by Dr Omolara Duke, the Director in charge of Financial Markets at the CBN.

The statement read: “The Central Bank of Nigeria (CBN) has sold the sum of US$122,671,000.00 (One Hundred and Twenty-Two Million, Six Hundred and Seventy-One Thousand United States Dollars) to 46 authorised dealers in its determination to promote stability and reduce market volatility in the foreign exchange market.”

According to the statement, the sales were made on Wednesday and Thursday this week.

On Wednesday, the apex bank sold $67.5 million to 27 authorized dealers, while purchasing $2.5 million from one authorized dealer. The bid range for these transactions was between N1,480/$1 and N1,500/$1. Payments for these transactions are scheduled for July 12, 2024, following a two-day settlement cycle (T+2).

Also, on Thursday, the CBN sold $55.17 million to 19 authorsed dealers at a rate of N1,540.0/$1. No foreign exchange was purchased on this date. The payments for these spot sales are due on July 15, 2024.

The CBN further urged all authorised dealers to ensure that foreign exchange purchases from the bank are exclusively used for trade-backed transactions, which must be reported within 72 hours.

The statement noted that the CBN supplies foreign exchange to the market through FX spot sales to authorized dealers using two-way quotes, aiming to improve liquidity.