For July 2024, Naija currency, naira, fall by 6.43% for official market, closing at N1608.73/$1. Naira reach four-month low for July, ranging from low of N1,500.32 to high of N1,621.12, wey pass N1,600 ceiling, according to FMDQ statistics.
Central Bank of Naija (CBN) try to prevent illiquidity for official market by selling dollars, but naira still devalue. FX turnover increase by CBN sales. As naira dey under intense pressure for July, CBN make at least three sales of foreign exchange (FX) to authorized dealers and one sale to Bureau de Change (BDC) operators.
CBN sell $377.17 million to authorized Forex dealers for July. Circulars from apex bank announcing transactions state say CBN sell $122.67 million to 46 authorized dealers during same week of July. Over two days, bank buy $2.5 million from one authorized dealer and sell $67.5 million to 27 other authorized dealers. Payments for these transactions expected to be made on July 12, 2024, after settlement period of two days (T+2).
CBN also ask all licensed dealers to make sure say any foreign exchange acquired from bank only dey used for trade-backed transactions, wey need to be reported to authorities within 72 hours. CBN announce sale of $106.5 million in foreign exchange (FX) to 29 FX dealer banks for following week. CBN sell $106.5 million to 29 authorized dealer banks on July 18 and 19, 2024, at exchange rates ranging from N1,498/$1 to N1,530.00/$1, and purchase $9.5 million from four authorized dealer banks at rates ranging from N1,510/$1 to N1,550/$1.
CBN link normal summer rise and pressure on corporate demand to recent changes for foreign exchange market. CBN claim say to maintain market stability and guarantee liquidity, dem start conducting routine foreign exchange sales through licensed Bureaux De Change (BDCs) and Authorised Dealer Banks.
CBN sell authorized dealers $148 million for third FX sale. 29 Authorised Dealer banks purchase foreign exchange at exchange rates ranging from N1,470.00/$1 to N1,510.00/$1. For significant move to support naira, CBN state on Thursday, July 18, 2024, say dem approve sales of foreign exchange to qualified BDCs in addition to authorized dealers. Bank declare say each BDC go get $20,000 at rate of N1,450/$1. Dis rate represent bottom band of NAFEM trading rate from previous trading day.
CBN sales occur during period of intense demand pressure on naira. CBN promise to keep addressing supply deficit to maintain market stability for recent statement wey announce sale of FX to authorized dealers. CBN recently order authorised dealer banks to gather and submit valid list of all outstanding FX demand in response to growing unmet demand for FX by end users. Purpose of dis action na to reduce negative effects of pressure from foreign exchange market on value of naira. Dem mention say to relieve demand pressure and supply foreign exchange for qualified transactions, CBN go hold Retail Dutch Auction System (rDAS) on Wednesday, August 7, 2024.
Source: Prime 9ja Online Pidgin: Naira Depreciation: CBN Sell Dollars to Save Naira