Central Bank of Nigeria Injects Over $300 Million to Stabilize Naira Exchange Rate
The Central Bank of Nigeria (CBN) has taken significant steps to stabilize the naira-dollar exchange rate by injecting over $300 million into Deposit Money Banks (DMBs) in the past two weeks. This move comes amidst escalating efforts to address the rapid depreciation of the naira.
The Association of Corporate Treasurers of Nigeria (ACTN) disclosed this development in an advisory memo circulated to its members, which was obtained by The PUNCH. The memo highlighted the recent interventions by the CBN, with dollar sales exceeding $200 million last week and additional sales this week at rates reportedly around $1,450.
An executive committee member of the ACTN, speaking on condition of anonymity, confirmed the authenticity of the memo, emphasizing that the information originated from the CBN. The dissemination of the memo aimed to keep members informed amid the currency's volatility.
The recent depreciation of the naira has been notable, with the official exchange rate reaching as high as N1,850/$. However, the currency witnessed a temporary rebound last Thursday and Friday following joint operations by the CBN and the Economic and Financial Crimes Commission (EFCC) against currency traders speculated to be engaging in activities against the naira.
Data from FMDQ securities revealed that the naira appreciated to 1,582/$ at the close of trading on Monday at the official market, marking a 0.75% increase from Friday's rate. Meanwhile, at the parallel market, the naira slightly declined to between N1,555/$ and N1,560/$, reflecting prevailing market sentiment.
In February, the CBN implemented various measures to address the naira's decline, including revising operations for International Money Transfer Operators (IMTOs) and canceling cash payments for Personal and Business Travels. The directive to process allowances through electronic channels aims to enhance transparency and accountability in the forex market.
Furthermore, the Federal Government disclosed plans to raise $10 billion to bolster liquidity in the forex market and initiated actions to curb illicit fund movements, including blocking online platforms of crypto firms. The EFCC has also intensified efforts against illegal currency operators, with recent arrests made in Enugu state and other parts of the country.
These measures underscore concerted efforts by the CBN and relevant authorities to stabilize the naira exchange rate and maintain market integrity amidst economic challenges.
