CBN Pumps Out Dollars Over Naira Constant Slip Against US Currency

THE naira lost value in relation to the US dollar on the official market, ending Tuesday, April 23, at N1,300 per dollar. Comparing this to the N1,234 per dollar rate that was seen the day before, there has been additional depreciation.

The Central Bank of Nigeria, or CBN, attempted to stop the naira's depreciation, but it was unabated. They achieved this by selling more US dollars to Bureau De Change (BDC) operators, companies authorized to deal in foreign exchange.

The CBN announced the dollar sale on Tuesday by posting a new circular with the reference TEM/FEM/PUB/001/013 on its website.

Signatory to it was Dr., CBN Director of the Trade and Exchange Department.

The Central Bank of Nigeria, or CBN, attempted to stop the naira's depreciation, but it was unabated. They achieved this by selling more US dollars to Bureau De Change (BDC) operators, companies authorized to deal in foreign exchange.

On Tuesday, the CBN published a new circular with the reference TEM/FEM/PUB/001/013 that announced the dollar sale and posted it on its website.

According to the apex bank, it will sell $10,000 to BDCs for N1,021 per dollar, and it has instructed the operators to sell at a spread of no more than 1.5% over the CBN rate.

The naira continued to weaken against the US dollar on Tuesday in the midst of the developments, hitting N1,300 per dollar at the Nigerian Autonomous Foreign Exchange.

The current exchange rate is N66 percent less than the N1,234 per dollar that was noted on Monday, April 22.

The intra-day high declined by N22, finishing at N1,317 per dollar from N1,295, according to a summary of the foreign exchange transaction. On the other hand, the intraday low increased to N1,000 from N1,051 per dollar.

On Monday, the overall daily turnover was $110.17 million, but on Tuesday it jumped to $133.65 million.

Currency traders sold US dollars at the parallel market on Tuesday between the rates of N1,300 and N1,320, down from N1,260 on Monday.

The Nigerian Autonomous Foreign Exchange Market, or NAFEM, saw the naira drop to N1,300 per US dollar on Tuesday in the midst of the developments.

The official foreign exchange market saw the Naira decline against the US dollar on Monday, April 22, to a value of N1,234 per unit. From the prior rate of N1,169.99 per dollar on Friday, April 19, this indicates a decrease of N65, or around 5.26 percent. Significant effects on commerce and economic stability may result from exchange rate fluctuations.

It said as follows: “We write to inform you of the sale of $10,000 by the CBN to BDCs at the rate of 1,021 per dollar. The BDCs are in turn to sell to eligible end users at a spread not more than 1.5 percent of the purchase price.”

This latest action is in line with the CBN's earlier declaration that it will keep defending the naira.

All qualified BDCs have been instructed by the CBN to start depositing naira into their assigned CBN accounts on April 22, 2024.

Also, it requested that the operators deliver other paperwork and evidence of payment to the relevant CBN locations in order to be paid out.