The Central Bank of Nigeria (CBN) has injected $122.671 million into the foreign exchange (forex) market to boost dollar liquidity.
Unlike previous interventions where the apex bank funded Bureaux De Change (BDCs), the current dollar intervention went to 46 authorised dealers, made up of banks and other financial institutions.
The CBN recently not only withdrew the licences of 4,173 BDCs but unveiled new regulatory guidelines pegging minimum capital base for BDCs at N2 billion for Tier-1 and N500 million for Tier-2 operators.
However, the new move to deepen liquidity in the market through dollar injections aligns with the apex bank’s determination to promote stability and reduce market volatility in the foreign exchange market.
A statement signed by the Bank’s Director in charge of Financial Markets, Dr. Omolara Duke, disclosed that of the total sale, US$67,500,000.00 was sold to 27 authorised dealers, while the sum of US$2.5 million was bought from one authorised dealer on July 10, 2024. The range of the bid for the July 10, 2024 sales was N1,480.0/US$-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.
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Similarly, on July 11, 2024, the sum of US$55,171, 000 was sold to 19 authorised dealers at N1,540.0/US$, and no FX was purchased. The value date for the payments of the spot sale is July 15, 2024.
The statement, therefore, urged all authorised dealers to ensure that foreign exchange purchases from the CBN are used exclusively for trade-backed transactions, which should be reported within 72 hours.
While reiterating that the CBN supplies foreign exchange to the Foreign Exchange (FX) market to improve liquidity through FX spot sales to Authorised Dealers using two-way quotes, it assured that the bank will continue to ensure stability in the FX market.
Meanwhile, the value of the naira to the dollar weakened by 359 basis points to close weekend at N1,563.80 per dollar at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).