Naira gains N96.60 after CBN sells dollars to authorised dealers, BDCs

The naira on Monday recorded gains over the dollar across official foreign exchange (FX) markets, following dollar sales to authorised dealers and the Bureau De Change (BDC) operators.

At the official market, the naira gained N96.60 as the dollar was quoted at N1,500.32 on Monday, representing 6.44 percent higher than N1,596.92 quoted on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ Securities Exchange Limited indicated.

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The volume of transactions, known as FX turnover, increased by 7.66 percent to $269.88 million on Monday from $250.67 million recorded on Friday.

At the parallel market, popularly called black market, the naira closed at N1,570 per dollar gaining 0.64 percent or N10 compared to N1,580 closed on Friday.

The intraday high printed at N1,610 per dollar on Monday as against N1,619 traded on Friday, while the intraday low was quoted at N1,490 on Monday from N1,495 per dollar.

On Friday the Central Bank of Nigeria (CBN) said it sold the sum of USS106.5 million to authorised dealers over a two-day period 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).

The 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 USS106.50 million sold to 29 authorised dealer banks at exchange rates ranging from N1,498.00/USS1 to N1,530.00/USS1.

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Additionally, the CBN purchased US$9.50 million 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, director, financial markets department, at 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 in accordance with prevailing market regulations.