The Central Bank of Nigeria (CBN) declared that from September 6 to September 30, it sold $543.5 million to dealer banks with authorization.
In a statement, Omolara Duke, the CBN’s Director of the Financial Markets Department, said that the sales took place at the Nigeria Foreign Exchange Market (NFEM) over the course of eleven dealing days using a two-way quote.
She clarified that the goal of the spot sales was to reduce market volatility caused by the strong demand for imports of commodities and the cyclical need for foreign exchange.
The statement stated that by providing the range of rates at which foreign exchange was sold by the CBN to authorised dealers, it aimed to inform and guide the general public on the pricing of foreign exchange.
As part of its comprehensive foreign exchange management strategy, it further said that the CBN will keep facilitating the supply of foreign exchange into the Nigerian Foreign Exchange Market (NFEM).
The text of the statement said, “The Central Bank of Nigeria (CBN) sold a total of US$543.5 million (Five Hundred and Forty-Three Million, Five Hundred Thousand US Dollars Only) from September 06-30, 2024, to Authorized Dealer banks through two-way quotes at the Nigerian Foreign Exchange Market (NFEM) on 11 dealing days.”
“The FX spot sales were to reduce observed market volatility driven by high demand for commodity importation and seasonal demand for FX. The value dates for all the transactions were T+2.”
Naira’s September Performance
The Niara performed better in the official market after the sale of FX to bank dealers. On the official NAFEM window, the Naira closed at N1,541 in September 2024, indicating a minor improvement above its performance in July and August 2024. On the other hand, the Naira hit its lowest level since February 2024 on the parallel market, closing at N1,700/$, its lowest level in seven months.
The Naira had its best month since June 2024, when it closed at N1,505/$ on the official window, according to statistics from Nairalytics. The official Naira exchange rate finished July at N1,608/$, while the parallel market saw a value of N1,600/$. August saw a similar pattern, with the Naira closing at N1,616/$ on the parallel market and N1,598/$ on the official market.
The Central Bank of Nigeria (CBN) plans to launch an electronic matching system for foreign exchange transactions in the Nigerian FX market, with an initial start date of December 1, 2024, as previously reported by THE NEWS CHRONICLES.
The top bank declared that it will release real-time rates and collaborate with the FMDA to create guidelines for EFEMS functioning.
