CBN Takes Another Step To Crash Dollar, Predicts New Exchange Rate
- The Central Bank of Nigeria is determined to find a solution to the current naira-to-dollar exchange rate
- Its latest move is an intervention in the forex markets to ensure liquidity and ease the demand pressure that has pushed the exchange rate above N1,600
- The CBN has provided renewed hope for the naira, indicating that exchange rate changes are expected in the coming months
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 (CBN) has stepped in to stop the naira's continuous depreciation against the dollar and other foreign currencies.
In its latest move, the CBN said it injected $106.5 million into the foreign exchange market in two days to enhance liquidity and ease FX demand pressure.
Source: Getty Images
The apex bank disclosed this in a circular signed by Omototla Duke, the director of financial markets departments at the CBN.
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The circular explained that the funds were sold to authorized dealer banks and licensed Bureau de Change (BDCs) between Thursday, July 19 and and Friday, July 20.
CBN promises more intervention
The apex bank also promised to continue injecting liquidity into various segments of the official markets.
The circular reads:
“The CBN wishes to assure the general public that it has commenced a regular sale of foreign exchange through authorised dealer banks and licensed Bureau de Change (BDCs) to improve supply in the foreign exchange market in line with its price stability mandate and its commitment to ensuring a well-functioning and liquid market.
“Over the next few weeks, the CBN will continue to support various segments of the official markets with liquidity.
“In line with the above, the CBN on Thursday, July 18, and Friday, July 19, 2024, sold a total sum of $106.500 million to 29 authorised dealer banks between an exchange rate range of N1, 498/$1 and N1, 530/$1.
“In addition, it bought $9.5 million from 4 authorised dealer banks at rates between N1,510/$1 and N1,550/$1.
“The value date for all transactions is July 19, 2024."
“Additionally, the CBN will continue closely monitoring commences with existing trading rules and regulations by authorised dealer banks to promote ethical conduct and support the drive to achieve stability in the foreign exchange market.
“Therefore, the general public is advised to direct their foreign exchange demand to their banks and BDC operators in accordance with prevailing market regulations.”
CBN predicts new naira to dollar exchange rate
Earlier, Legit.ng reported that the CBN asked Nigerians to expect the value of the Nigerian currency to improve in the coming months.
The apex bank said increasing domestic crude oil production and exports would enhance the naira's value.
The CBN recently conducted another round of forex sales and reiterated its determination to tackle depreciation of the naira.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
