CBN injects $106.5m into forex market amid demand surge

…Summer holiday drives demand surge as CBN injects $106.5m

The Central Bank of Nigeria (CBN) on Friday said it sold the sum of USS106.5 million to authorised dealers over two days to stabilise the Naira.

The transactions occurred on Thursday, July 18, and Friday, July 19, 2024.

The CBN revealed that recent fluctuations in the forex market are largely driven by increased demand from corporate entities and the expected seasonal surge during the summer.

To address these pressures, the CBN has begun regular sales of foreign exchange through Authorized Dealer Banks and licensed Bureaux De Change (BDCs).

This initiative aligns with the CBN’s mandate to ensure price stability and maintain a liquid and well-functioning market.

Over the coming weeks, the CBN plans to continue providing liquidity support to various segments of the official markets. The sales conducted on July 18 and 19 saw a total of USS106,500,000 sold to 29 authorised dealer banks at exchange rates ranging from N1,498.00/USS1 to N1,530.00/USS1.

Additionally, the CBN purchased US$9,500,000 from four authorized dealer banks at rates between N1,510.00/USS1 and N1,550.00/US$1. The value date for these transactions is set for July 19, 2024.

Omolara Omotunde Duke, a spokesperson for the CBN, emphasised that the bank will closely monitor compliance with existing trading rules and regulations to promote ethical conduct among authorized dealer banks. This effort is part of a broader strategy to achieve stability in the foreign exchange market.

The CBN advises the general public to channel their foreign exchange demands through their banks and BDC operators by prevailing market regulations.

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This proactive approach by the CBN underscores its commitment to maintaining stability in the foreign exchange market amidst rising demand pressures.

The FX market closed on Friday with the naira losing 1.88 per cent as the dollar was quoted at N1,596.92 compared to N1,566.82 quoted on Thursday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data from the FMDQ Securities Exchange Limited.

At the parallel market also known as the black market, the local currency closed at N1,580 as against N1,5640 closed on Thursday.