“It Is Good News”: CBN Takes Another Step To Crash Dollar, Targets New Exchange Rate
- The Central Bank of Nigeria has carried out another intervention in the foreign exchange market
- In its latest move the CBN sold over $100 million to authorised dealers to ensure liquidity and ease demand pressure
- The CBN intervention failed to help the naira's performance in the the Nigerian Autonomous Foreign Exchange Market (NAFEM)
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 carried out another intervention in the foreign exchange market, selling over $148 million to 29 authorised dealers in a bid to ensure liquidity and ease demand pressure.
Source: Getty Images
According to a statement posted on the CBN's website, the dollar sales were carried out on Monday, July 22 and Tuesday, July 23, 2024.
The apex bank disclosed that the forex was sold to banks and BDC operators at an exchange rate of N1,470/$1 and N1,510/$1, Punch reports.
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The statement read:
“The Central Bank of Nigeria sold a cumulative sum of US S148,000,000.00 in the Nigerian Foreign Exchange Market to Authorised Dealers on July 22 and 23, 2024.
“The sale of foreign exchange was to 29 Authorized Dealer banks at an exchange rate of 1470.00/US$1-1510.00/US$1.
It added that the apex bank also purchased $2 million from one authorised dealer bank at the rate of 1,505.00/$.
“In addition, the CBN bought US$2,000,000.00 (Two Million United States Dollars) from one authorised dealer bank at the rate of N1,505/US$.
“The value dates for all the transactions held on July 22, 2024, was T+0, while that of July 23, 2024, was T+0.”
Naira to dollar exchange rate
Despite CBN's efforts, the naira's performance remains weak in the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Data from FMDQ Securities shows that the naira's latest exchange rate is N1,609.29/$1 as of Friday, July 26, 2024, representing a decline of N5.49 or 0.34% compared with the preceding day’s rate of N1,603.80/$1.
Reacting to the CBN's latest sale, financial analyst Kelvin Umemi is optimistic that the naira will improve.
"The major challenge for the naira is liquidity crises. If the CBN can provide the necessary support, the naira will recover."
"The rise in foreign reserves is good news for the naira."
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.
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Source: Legit.ng
