CBN Sells $300m to Access, UBA, Zenith, Others, to Help Naira’s Value Rise in Official, Black Market

• The Central Bank of Nigeria (CBN) continues its push to help the naira recover its lost value against the US dollar in official and unofficial markets
• The latest move is the sale of dollars to Nigerian banks to help boost liquidity in the official exchange markets
• In the last few days, the naira has recovered a significant amount of its value against the dollar in the forex markets

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria has sold over $300 million to Nigerian banks in the last 14 days as it continues to stabilise the naira value in the foreign exchange markets.

This was disclosed by the Association of Corporate Treasurers of Nigeria in an advisory memo made available to its members.

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The memo read in part:

“We are sure you must have been following up on activities in the foreign exchange market, with rates at the official market going as high as N1850/$.

“If you are not aware, kindly note that the CBN last week sold over $200m to the banks below N1,500/dollar. Similarly, this week, the CBN has on two consecutive days sold FX to banks at rates we understand to be in the $1,450 range. We hope this information helps guide your decisions regarding the rates and spreads you get from your banks.”

Punch reports that the dollar sales came on the heels of rapid depreciation of the naira in recent weeks.

The value of naira rises

It seems the CBN's efforts are paying off, as in the last few days, the naira has appreciated in both the official and unofficial markets.

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FMDQ data shows that on Monday, February 26, 2024, the naira value appreciated against the dollar to 1,582/$ at the close of trading activities on the Nigerian Autonomous Foreign Exchange Market ("NAFEM").

Monday's rate represents a N12 or 0.75% appreciation for the naira compared to N1,594 recorded at NAFEM on Friday.

It's the same story for the naira in the peer-to-peer market.

Checks by Legit.ng show that the Nigerian currency improved its value against the US dollar by N62, selling at N1,643/$1 compared with the N1.705/$1 it traded on the previous day.

In the black market, the naira gained N180 against the dollar on Monday, quoting at N1,520/$1 versus Sunday's closing price of N1,700/$1.

CBN mops up excess liquidity from banks

Earlier, Legit.ng reported that the Central Bank of Nigeria has revealed that it mopped up about N1 trillion via Open Market Operations.

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The move aims to reduce excess liquidity in the system, fight inflation, and stem naira depreciation. The CBN is determined to find a solution for the Nigerian economy and has released various guidelines to make it happen.

Source: Legit.ng