The Central Bank of Nigeria (CBN) on Tuesday sold US dollars in the spot FX market for the first time since September 2023.
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BusinessDay reported that CBN sold up to US$86 million as at 1.30pm, up from the US$30 million it had sold by morning.
Nigeria’s Apex Bank had frozen dollar sales at the spot market in order to deal with a foreign exchange demand backlog that was undermining investor confidence in the bank’s currency reforms.
CBN Governor Olayemi Cardoso had in an interview earlier this put the dollars owed by the CBN in forward contracts alone at US$2.2 billion.
BusinessDay’s report citing sources familiar with sales stated that CBN sold the dollars at a rate as low as ₦1,490.00 per dollar, with each bank securing between US$2-5 million.
“Rather than fix rates, the CBN called banks to bid freely, and that’s good for the market,” a source told BusinessDay.
“CBN being back in the market is highly commendable, as its presence will boost trading liquidity,” another source familiar with the matter said.
Analysts, however, say the CBN needs to conduct the sale professionally and consistently in order to reap the full gains of the latest move.
“This is step one; the next step is to establish a pattern for the sales, and then the exchange rate trajectory will begin to change,” one of the sources told BusinessDay
The dollar sales is the apex bank’s latest attempt to stabilise the naira, which fell to a record low of ₦1,534.39 per dollar at the official foreign exchange market on Monday as demand trumped supply.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
