CBN Sells $122.67 Million To Stabilize Forex Market, Reserves Surge To $35.05 Billion

The Central Bank of Nigeria (CBN) has sold approximately $122.67 million to 46 authorized dealers to promote stability and reduce volatility in the foreign exchange market.

In a statement, Dr. Omolara Duke, the Bank’s Director in charge of Financial Markets, revealed that $67.5 million was sold to 27 dealers, while $2.5 million was bought from one authorized dealer on July 10, 2024. The bid range for the July 10 sales was ₦1,480.0/US$ to ₦1,500.0/US$, with a value date of July 12, 2024, based on the two-day settlement cycle.

On July 11, 2024, an additional $55.17 million was sold to 19 authorized dealers at ₦1,540.0/US$, with no foreign exchange purchased. The value date for these payments is July 15, 2024.

The apex bank emphasized that authorized dealers must use foreign exchange purchases from the CBN exclusively for trade-backed transactions, which should be reported within 72 hours.

The CBN reiterated its commitment to supplying foreign exchange to improve market liquidity through FX spot sales to authorized dealers using two-way quotes, assuring continued efforts to stabilize the FX market.

As of July 8, 2024, Nigeria’s external reserves increased to $35.05 billion. According to CBN data, the reserves stood at $35.09 billion on May 30, 2023, about two weeks before the introduction of the FX unification policy in June 2023. Following the policy announcement, reserves dropped to $34.66 billion.

Between July and December 2023, the reserves fluctuated within the $33 billion range. This year, they hit a low of $32.11 billion on April 19, 2024. The CBN Governor attributed the decline to debt repayments and other standard financial obligations rather than efforts to defend the naira.

In the last few weeks of June, the exchange rate surged, pushing reserves above $34 billion for the first time since April. The reserves continued to grow in July, reaching the highest level in the past year.

Since hitting a low of $32.11 billion in April under President Tinubu, external reserves have surged by $2.94 billion in less than three months. The CBN plans to double diaspora remittance inflows this year to maintain a steady flow of foreign exchange into the country.