In the ongoing efforts to stabilize the naira-dollar exchange rate, the Central Bank of Nigeria (CBN) has injected over $300 million into Deposit Money Banks (DMBs) in the past two weeks, according to an advisory memo from the Association of Corporate Treasurers of Nigeria (ACTN). The memo, shared with its members, revealed that the CBN sold over $200 million to banks below N1,500/dollar last week and continued this week with sales at rates believed to be in the $1,450 range.
The disclosure comes at a time when the official market rates have surged to as high as N1,850/$. The ACTN, in its memo, aimed to update members on the foreign exchange market’s dynamics, guiding decisions regarding rates and spreads obtained from banks. An executive committee member of the ACTN confirmed the information, stating that the memo sought to keep members informed amid the notable depreciation of the naira.
The naira’s value has faced considerable challenges in recent weeks, starting the year at N891/$ and experiencing a series of depreciations in both the official Nigeria Autonomous Foreign Exchange Market and parallel markets. However, a recent intervention by the CBN, in collaboration with the Economic and Financial Crimes Commission (EFCC), led to a temporary appreciation. The naira closed at 1,582/$ at the official market on Monday, showing a 0.75% increase from the previous trading day.
Despite this improvement, the naira slipped slightly at the black market, ranging between N1,555/dollar and N1,560/dollar, reflecting market sentiment. The rise in naira value was influenced by EFCC operations against currency speculators, with raids on traders in Abuja leading to over 250 arrests. The CBN’s measures in restricting services for International Money Transfer Operators (IMTOs) and canceling cash payments for Personal and Business Travels have also played a role in stabilizing the forex market.
The recent injection of funds by the CBN underscores the central bank’s commitment to mitigating the challenges posed by the fluctuating exchange rates and economic uncertainties. The impact of these interventions will be closely monitored as stakeholders assess the effectiveness of the measures in sustaining stability in Nigeria’s foreign exchange landscape.
