See why naira is likely to bounce back in the foreign exchange market

• The CBN has taken another new measure to stabilise the foreign exchange market and boost the naira value
• The latest development is the injecting of additional funds into the market to improve liquidity, which is one of the naira pressure challenges
• The current value of Nigerian currencies in the official and unofficial markets has been a big headache for the CBN

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 announced the injection of a $2.9 billion deposit into a special account.

The deposit is aimed at stabilising the foreign exchange market and boosting the value of the naira.

Naira's value could improve after the holidays Photo credit: Bloomberg/contributor
Source: Facebook

The CBN stated this at the last Federation Account Allocation Committee (FAAC) meeting.

The apex bank described the account as a gazelle funding account, a key part of Nigeria’s strategy to leverage its oil resources for economic growth.

Legit.ng had earlier reported that on June 6, 2024, Afreximbank announced the release of an additional $925 million for Nigeria’s oil-backed prepayment facility.

The Nation reports that funds are part of the $3.3 billion loan from the African Export-Import Bank (Afreximbank) and have been deposited into the Project Gazelle Funding account.

This facility was originally sponsored by the Nigerian National Petroleum Company Limited (NNPCL).

Impact of CBN's Special Account

The announcement comes as welcome news for the naira, which has been facing pressure in recent months.

After a rebound in February 2024, the naira has depreciated significantly against major currencies in the official and unofficial markets.

In the official market, data from FMDQ Securities shows that the value closed on Friday before the Sallah public holidays at N1,482.72/$1, while in the unofficial market, Bureau de Change operators are selling dollars at above N1,500.

CBN issues new directives on street trading

Legit.ng previously reported that the CBN banned street trading of foreign currencies by Bureau de Change (BDC) operators, citing the need to regulate the foreign exchange market properly.

CBN's director of risk management, Blaise Ijebor, said street trading of foreign currencies is not allowed as the apex bank does not want BDCs under trees.

He said the traders should be in offices where customers can come in and change their currencies.

Source: Legit.ng