CBN sells $543.5m to stabilise FX market

 The Central Bank of Nigeria (CBN), on Friday,  disclosed that it sold a total of $543.5 million to authorised dealer banks in the Nigerian Foreign Exchange Market (NFEM) between September 6 and September 30, 2024.

The move, executed over 11 trading days, was part of the bank’s efforts to manage market volatility and address heightened demand for foreign exchange, particularly for commodity importation.

During this period, the CBN facilitated sales through two-way quotes, offering FX at rates ranging from N1,530 to N1,605 per dollar, depending on the transaction day. The largest sale occurred on September 26, 2024, when the CBN sold $80 million at rates between N1570 and N1580 per US dollar.

The FX transactions carried out during the time were set on a value date of T+2, meaning settlement took place two days after the transaction.

The CBN’s intervention was aimed at curbing market volatility spurred by the significant demand for FX, especially for commodity imports. As Nigeria continues to navigate economic challenges, including pressures on its currency, the naira, the bank is focused on a strategy of ensuring adequate FX supply to stabilise the market.

In a statement, Omolara O. Duke, director of the CBN’s Financial Markets department, emphasised the importance of the spot sales as part of the broader FX management strategy. “The CBN will continue to facilitate the supply of FX into the Nigerian foreign exchange market to ensure market stability and meet the country’s foreign exchange needs,” Duke said.

The CBN hopes that by transparently sharing the rates at which FX was sold to authorised dealers, the market will gain insights into fair pricing, helping to guide future transactions.

The measure is expected to help stabilise the naira and support the government’s efforts to manage inflation and foreign exchange demand effectively.

For further details on the FX sales, the CBN has made additional information available through its official channels.