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In An Effort To Increase The Value Of The Naira, CBN Sells $300 Million To Access, UBA, Zenith, and other companies
TheCentralBankofNigeria(CBN)isstillworkingtoincreasethenaira’svalueonofficialandunofficialmarketsrelativetotheUSdollar. SellingdollarstoNigerianbanksisoneofitsmostrecenttactics,whichaimstoimproveliquidityintheofficialexchangemarkets. Thenairahasseenanotablerecoveryintheforexmarketsinrecentdays,demonstratingthenoteworthyoutcomesofthisproactiveapproach.
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TheAssociationofCorporateTreasurersofNigeriarevealedthattheCBNhaspumpedover$300millionintoNigerianbanksoverthelasttwoweeks. ThisactionisacomponentoftheCBN’slargerplantomaintainthevalueofthenairaontheforeignexchangemarkets. Notably,theCBNhasrecentlysolddollarstobanksforlessthanN1,500.
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Accordingtoreports,thesharpdeclineinthevalueofthenairainthepreviousfewweekswasthereasonbehindthesedollarsales. Therecentstrengtheningofthenairainbothofficialandblackmarkets,however,suggeststhattheCBN’sinterventionsarehavingapositiveeffect. AccordingtodatafromFMDQ,atthecloseoftradingontheNigerianAutonomousForeignExchangeMarket(NAFEM)onMonday,February26,2024,thevalueofthenairaincreasedinrelationtothedollarto1,582/$. ThisrepresentsasignificantincreaseofN12,or0.75%,fromtheprevioustradingday. Othermarketsalsoshowedsimilartrends. ThenairagainedN62againstthedollaronthepeer-to-peermarket,makingittradeatN1,643/$1. Inthemeantime,thenairagainedasignificantN180versusthedollarontheblackmarket.
Inaddition,theCBNhasimplementedOpenMarketOperationstoabsorbexcessliquidityfrombanksinanefforttoreduceinflationarypressuresandstopthedepreciationofthenaira. TheCBN’sdedicationtoresolvingNigeria’seconomicproblemssustainablyisdemonstratedbythesecoordinatedeffortsandtheguidelinesthathavebeenreleasedinthisregard.
