CBN sold $543.5m to stabilize FX market in September

The Central Bank of Nigeria (CBN) has disclosed that it sold a total of $543.5 million to authorized dealer banks in the Nigerian Foreign Exchange Market (NFEM) from September 6 to 30, 2024.

 The bank stated that this intervention aimed to mitigate market volatility caused by rising demand for foreign exchange (FX), particularly driven by commodity imports and seasonal pressures.

According to a statement issued by Omolara Duke, Director of the Financial Markets Department, the CBN conducted the FX sales over 11 trading days, utilizing a two-way quote system. The transactions were settled under a T+2 arrangement, meaning the exchange of currency took place two business days after the trades were executed.

A detailed breakdown of the sales shows that $39 million was sold on September 6 at exchange rates ranging between N1,580 and N1,605 per dollar. On September 9, $66 million was sold at rates between N1,570 and N1,585 per dollar. On September 11, $77 million was sold at rates between N1,540 and N1,575 per dollar, while on September 13, $46 million was sold within the same price range.

Further sales occurred on September 18, when $24 million was sold at rates between N1,530 and N1,540 per dollar. The following day, September 19, $28 million was sold at N1,540 to N1,555 per dollar. On September 20, $31 million was sold at a rate of N1,540 to N1,545 per dollar, and on September 23, $17.5 million was sold at N1,540 per dollar.

On September 26, $80 million was sold at rates ranging from N1,570 to N1,580 per dollar. The next day, September 27, $79 million was sold at a rate between N1,530 and N1,580 per dollar. Finally, on September 30, $56 million was sold at a rate of N1,540 per dollar.

The CBN noted that this information is intended to guide the public on FX pricing by referencing the rates at which FX was sold to authorized dealer banks. The bank reiterated its commitment to supporting the flow of foreign exchange into the Nigerian market as part of its comprehensive FX management strategy.

This latest sale follows a significant transaction on August 11, where the CBN sold $876.26 million at N1,495 per dollar. Two months ago, the CBN also sold $148 million in the NFEM to authorized dealer banks over two trading days in late July.

The CBN emphasized its continuous monitoring of market conditions and reiterated its determination to intervene when necessary to maintain stability and ensure adequate FX supply.