Forex: CBN Sells $122.671m To 46 Authorised Dealers

The Central Bank of Nigeria (CBN) has sold the sum of $122,671m to 46 authorised dealers, in its 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,  $67,500m was sold to 27 dealers, while the sum of US$2.5m was bought from one authorised dealer on July 10, 2024.

The range of the bid for the July 10, 2024 sales was ₦1,480.0/US$- ₦1,500.0/US$, while the value date for the payments, going by the settlement cycle of two days, is July 12, 2024.

Similarly, on July 11, 2024, the sum of $55,171m was sold to 19  authorised dealers at ₦1,540.0/US$, and no FX was purchased. The value date for the payments of the spot sale is July 15, 2024.

The apex bank 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 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.

On Thursday, Channels Television reported an increase in Nigeria’s external reserves to $35.05bn as of July 8, 2024.

According to CBN’s data on external reserves, as of May 30 2023, the reserves were $35.09bn, about 14 days before the introduction of the foreign exchange (FX) unification policy in June 2023.

However, when the CBN announced the FX unification policy, the external reserves dropped to $34.66bn.

From July to December 2023, the reserves fluctuated within the $33bn range.

This year, the reserves plunged to a low of $32.11bn on April 19, 2024, according to the data.

While addressing the reason behind the drop, the central bank Governor, blamed the decreasing reserves primarily due to debt repayments and other standard financial obligations, rather than efforts to defend the naira.

Analysed CBN’s data revealed a surge in exchange rate in the last few weeks ending the month of June, above $34bn for the first time since April. The reserves have continued to grow in July, reaching the highest reserve in the last year.

Since the lowest level of $32.11bn under Tinubu in April, the external reserves have surged by $2.94bn in less than three months, according to the CBN data.

The CBN had said it plans to double the diasporas’ remittance inflow this year through a steady flow of foreign exchange into the country.