CBN injects $106.5 Million into FX market amidst rising demand pressure

The Central Bank of Nigeria (CBN) has announced an intervention in the foreign exchange market, injecting a total of $106.5 million to address mounting demand pressures from corporate entities.

The bank made the move to improve supply in the foreign exchange market in line with its price stability mandate and its commitment to ensure a well-functioning and liquid market.

In a statement on Friday, signed by the Director of the Financial Markets Department, Omolara Duke, the CBN said it sold the $106.5 million to 29 authorised dealer banks.

According to the CBN, the transactions were conducted within an exchange rate range of N1,498.00/$1 to N1,530.00/$1.

The apex bank also mentioned that it bought $9,500,000 from four authorised dealer banks at exchange rates ranging from N1,510.00/$1 to N1,550.00/$1, with all transactions having a value date of 19 July.

The CBN emphasised its ongoing commitment to supporting various segments of the official markets with liquidity over the coming weeks.

To promote ethical conduct and support the drive for market stability, the CBN also highlighted its intention to closely monitor compliance with existing trading rules and regulations by authorised dealer banks.

“The general public is advised to direct their foreign exchange demand to their banks and BDC operators in accordance with prevailing market regulations,” the statement read.

About a week ago, the CBN sold foreign currencies worth $122.67 million to 46 authorised dealers in two days to ensure stability and reduce foreign exchange (FX) market volatility.

It announced that the total transaction of $67.50 million was sold to 27 authorised dealers and also $2.5 million was bought from one authorised dealer on 10 July.

“The range of the bid for the July 10, 2024 sales was N1,480.0/US$ – N1,500.0/US$, while the value date for the payments, going by the settlement cycle of two days (T+2), is July 12, 2024.

“Similarly, on July 11, 2024, the sum of US$55,171, 000 (Fifty-Five Million, One Hundred and Seventy-One Thousand US Dollars) was sold to 19 Authorised Dealers at N1,540.0/US$, and no FX was purchased,” its 12 July statement read.