The Central Bank of Nigeria (CBN) has announced the sale of $543.5 million to authorized dealer banks at exchange rates ranging from N1,540 to N1,580 between September 6 and September 30, 2024. This transaction totals approximately N844.92 billion.
In a statement released on Friday in Abuja, Omolara Duke, Director of the Financial Markets Department, clarified that the recent dollar sales were intended to alleviate market volatility caused by high demand for commodity imports and seasonal foreign exchange (FX) requirements. Over 11 trading days, the CBN sold these dollars to an average of 26 authorized dealer banks.Despite these measures, the naira only appreciated by 2.77 percent, closing at N1,541 in the official market, while it dropped to N1,700 per dollar in the parallel market by the end of September.Duke highlighted that the CBN’s sales were executed through two-way quotes in the Nigerian Foreign Exchange Market, with the goal of providing stability amid growing pressures on the currency. She stated, “This press release is to educate and provide guidance to the general public on the pricing of FX by taking a clue from the range of rates at which FX was sold by the CBN to Authorized Dealer Banks.”
The declining value of the naira continues to raise concerns among citizens, significantly impacting the prices of essential goods. Since Olayemi Cardoso assumed the role of CBN Governor, the local currency has depreciated by over 50 percent within the past year.Cardoso has emphasized that the bank is actively working to strengthen the naira, attributing the pressures on foreign exchange demand to monthly disbursements from the Federation Account Allocation Committee (FAAC).In a positive development, Nigeria’s foreign reserves saw an increase of nearly 5 percent in September, rising from $36.24 billion to $38.058 billion by the end of the month.
A detailed breakdown of the CBN’s dollar sales has shown fluctuations in the amounts sold on different days. For instance, on September 6, $39 million was sold at rates ranging from N1,580 to N1,605, with subsequent sales varying in both amount and exchange rate.The CBN intends to keep facilitating FX supply as part of its broader management strategy aimed at stabilizing the naira in the foreign exchange market. This consistent approach is crucial for addressing the ongoing challenges in the currency’s valuation.
