CBN Sells $122.671m to 46 Authorised Dealers, Seeks to Stabilise FX Market

Nume Ekeghe

In a bid to promote stability and reduce volatility in the foreign exchange market, the Central Bank of Nigeria (CBN) has executed a significant foreign exchange (FX) transaction, selling a total of $122.671 million to 46 authorised dealers at competitive rates ranging from N1,480 to N1,540.

The apex bank in a statement signed by the Bank’s Director of Financial Markets CBN, Dr. Omolara Duke, detailing the transaction, stated that a total amount of $67.5 million was sold to 27 authorised dealers, while $2.5 million was purchased from one authorised dealer on July 10, 2024. The bidding range for the transaction was between N1,480/$ and N1,500/$, with a value date for payments set for July 12, 2024, adhering to a two-day settlement cycle (T+2).

Additionally, on July 11, 2024, the CBN sold $55,171,000 to 19 authorised dealers at a rate of N1,540/$, with no FX purchased on this date. The value date for the spot sales payment was July 15, 2024.

The statement urged all authorised dealers to ensure that FX purchases from the CBN are used exclusively for trade-backed transactions and must be reported within 72 hours.

Reiterating its commitment to improving liquidity, the CBN supplies FX to the market through spot sales to authorised dealers using two-way quotes. The Bank assured that it would continue to strive for stability in the FX market.

It stated: “The CBN’s directive emphasises that FX acquired from the bank must be exclusively utilised for trade-backed transactions, with reporting required within 72 hours. This measure is intended to ensure transparency and proper use of allocated resources.

“By maintaining a consistent supply of FX through FX spot sales to authorised dealers, the CBN aims to improve market liquidity and assure market participants of its commitment to sustaining FX market stability.

“This proactive approach is crucial for supporting economic activities and fostering confidence among stakeholders in the Nigerian financial market.”