The Central Bank of Nigeria (CBN) has injected over $300 million into Deposit Money Banks (DMBs) within the past two weeks in a bid to stabilize the fluctuating naira-dollar exchange rate. This move comes amidst mounting efforts to mitigate the economic challenges facing the country.
The Association of Corporate Treasurers of Nigeria (ACTN) revealed this development in an advisory memo circulated among its members, as reported by The PUNCH. According to the memo, the CBN sold over $200 million to banks at rates below N1,500 per dollar last week. Similarly, this week, the CBN conducted FX sales to banks at rates around $1,450.
An executive committee member of the ACTN, who preferred anonymity, confirmed the authenticity of the memo, emphasizing that the information was sourced directly from the CBN. The memo aimed to provide valuable guidance to members amid the significant depreciation of the naira.
The injection of dollars by the CBN follows a series of rapid depreciations of the naira in recent weeks. At the beginning of the year, the naira opened at N891/$ but has since experienced considerable declines, particularly in both the official Nigeria Autonomous Foreign Exchange Market (NAFEM) and parallel markets.
However, there was a temporary appreciation of the naira against the dollar in the parallel market last Thursday and Friday. This followed coordinated efforts by the CBN and the Economic and Financial Crimes Commission (EFCC) to clamp down on street currency traders suspected of speculating against the local currency.
Despite these efforts, the naira experienced slight fluctuations in value. At the close of trading activities on Monday, the naira appreciated to 1,582/$ at the official market, marking a slight increase from the previous trading day. Conversely, the naira slipped slightly at the black market to between N1,555/dollar and N1,560/dollar due to prevailing market sentiments.
To address the volatility in the foreign exchange market, the CBN has implemented various measures, including revising operations for International Money Transfer Operators (IMTOs) and canceling cash payments for Personal and Business Travels. Additionally, the Federal Government is reportedly working to raise $10 billion to enhance liquidity in the forex market.
Moreover, in a bid to curb illicit financial activities, the government has reportedly blocked several online platforms, including Binance and other crypto firms. The EFCC has also intensified efforts to apprehend illegal Bureau de Change operators engaged in currency speculation across different states in the country, with recent arrests made in Enugu State.
