In a concerted effort to stabilize the naira-dollar exchange rate, the Central Bank of Nigeria (CBN) has injected over $300 million into Deposit Money Banks (DMBs) in the past two weeks.
The Central Bank of Nigeria (CBN) sold over $200 million to banks last week at rates below N1,500 per dollar, according to an advisory memo by the Association of Corporate Treasurers of Nigeria (ACTN). This week, the CBN has also continued to sell foreign exchange to banks at rates believed to be around $1,450.
An executive committee member of the ACTN, speaking on condition of anonymity, confirmed the authenticity of the memo, stating that it was circulated to guide members amidst the significant depreciation of the naira. The memo, sourced directly from the CBN, aimed to keep members informed about ongoing developments in the foreign exchange market.
The recent dollar sales come amidst a period of rapid naira depreciation. Since the beginning of the year, the naira has faced multiple challenges, with rates reaching as high as N1,850 per dollar in the official market.
However, there has been a recent uptick in the value of the naira, particularly in the parallel market, following joint efforts by the CBN and the Economic and Financial Crimes Commission (EFCC) to crack down on currency speculators. This crackdown led to a significant increase in the value of the naira against the dollar in both the official and parallel markets.
At the close of trading activities on Monday, the naira appreciated 1,582 per dollar in the official market, representing a 0.75% increase from the previous trading day. Meanwhile, at the parallel market, the naira slipped slightly to between N1,555 and N1,560 per dollar, influenced by market sentiment.
Despite fluctuations, the recent increase in the value of the naira can be attributed to improved market sentiment, fueled by ongoing efforts to clamp down on illegal currency trading activities by the EFCC. As the EFCC continues its operations in Abuja and Lagos, market participants remain cautiously optimistic about the naira’s performance in the coming days.