In an effort to stabilize the naira-dollar exchange rate, the Central Bank of Nigeria (CBN) has provided over $300 million to Deposit Money Banks (DMBs) in the past two weeks.
This information was disclosed by the Association of Corporate Treasurers of Nigeria (ACTN) in an advisory memo circulated among its members. The memo, obtained by The Punch, highlighted the recent interventions by the CBN to address the volatility in the foreign exchange market.
According to the memo, the CBN sold over $200 million to banks last week at rates below N1,500/$. Similarly, in the current week, the CBN has conducted FX sales to banks at rates approximately in the $1,450 range.
An executive committee member of the ACTN, speaking on condition of anonymity, confirmed the accuracy of the information, stating that it was sourced directly from the CBN. The memo was intended to keep members informed amidst the challenges posed by the depreciating value of the naira.
The intervention follows a period of rapid depreciation of the naira, which has faced pressure both at the official Nigeria Autonomous Foreign Exchange Market (NAFEM) and the parallel markets.
However, recent actions by the CBN, including joint operations with the Economic and Financial Crimes Commission (EFCC) to clamp down on currency speculators, have led to a slight appreciation of the naira. The currency firmed up at the official market, reaching 1,582/$ at the close of trading activities on Monday.
At the parallel market, the naira experienced some fluctuations, trading between N1,555/$ and N1,560/$. The recent improvements were attributed to market sentiment, bolstered by the EFCC’s continued crackdown on black market operators.
In addition to interventions in the forex market, the CBN has implemented various measures aimed at stabilizing the naira. These include revising operations for International Money Transfer Operators (IMTOs) to restrict services to inbound transfers with mandatory naira payouts. The CBN also directed banks to process allowances for Personal and Business Travels through electronic channels, promoting transparency and accountability in the forex market.
