CBN offloads more than $300 million to banks, contributing to the strengthening of the naira

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The Central Bank of Nigeria injected over $300 million into Deposit Money Banks in the last two weeks as part of determined efforts to stabilize the fluctuating naira-dollar exchange rate.

The Association of Corporate Treasurers of Nigeria conveyed this information in an advisory memo to its members, emphasizing the need for informed decision-making amidst the naira’s rapid depreciation.

According to the advisory, the Central Bank sold over $200 million to banks below N1,500/dollar last week, and this week witnessed consecutive days of FX sales to banks at rates around $1,450.

The disclosure aimed to guide members in navigating the challenges posed by the sharp decline in the naira’s value.

An executive committee member of the ACTN, confirming the authenticity of the memo, stated that the information was sourced directly from the CBN.

The dollar sales responded to the recent depreciation of the naira, which began the year at N891/$ but faced significant challenges in both official and parallel markets.

The naira saw a brief recovery at the parallel market last Thursday and Friday after joint efforts by the CBN and the EFCC against currency traders speculating against the local currency.

However, at the official market on Monday, the naira appreciated to 1,582/$, a 0.75% increase from the previous trading day.

Despite fluctuations, the naira’s value demonstrated resilience, influenced by market sentiment and EFCC actions against black market operators.

The CBN’s initiatives included revising operations for International Money Transfer Operators and cancelling cash payments for Personal and Business Travels, directing electronic channels for allowances to ensure transparency in the forex market.

In a broader context, the Federal Government aimed to raise $10 billion to enhance liquidity in the foreign exchange market and took measures to prevent illicit movement of funds by blocking online platforms of crypto firms, including Binance, Forextime, OctaFX, Crypto, FXTM, and Coinbase.

Additionally, the EFCC continued its crackdown on illegal Bureau de Change operators across the country, arresting 115 suspected currency racketeers in Enugu last Wednesday, reinforcing efforts to curb currency speculation.

 

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