The Central Bank of Nigeria (CBN) has injected over $300 million into Deposit Money Banks (DMBs) over the past two weeks in a bid to stabilize the naira-dollar exchange rate, according to a disclosure by the Association of Corporate Treasurers of Nigeria (ACTN).
In an advisory memo shared with its members, the ACTN revealed that the CBN sold the dollars to banks at rates below N1,500 per dollar. The memo highlighted that the CBN’s interventions aimed to counteract the rapid depreciation of the naira, which had seen the exchange rate soar to as high as N1,850 per dollar in the official market.
An executive committee member of the ACTN, speaking anonymously, confirmed the memo’s authenticity, emphasizing that the information provided was sourced directly from the CBN. The memo was disseminated to keep members informed amid the challenging economic environment characterized by the depreciating value of the naira.
The recent interventions by the CBN come in response to the persistent decline in the value of the naira, which commenced at N891 per dollar at the beginning of the year. The naira’s depreciation has been observed across both the official Nigeria Autonomous Foreign Exchange Market (NAFEM) and parallel markets.
However, the naira experienced a rebound against the dollar in both markets following joint operations by the CBN and the Economic and Financial Crimes Commission (EFCC) to crackdown on currency speculators in Abuja. This crackdown led to an improvement in market sentiment, resulting in a firming up of the naira’s value.
At the official market, the naira appreciated to N1,582 per dollar, representing a 0.75% increase from the previous trading session. Meanwhile, at the black market, the naira traded between N1,555 and N1,560 per dollar, with slight fluctuations influenced by market sentiment.
The recent interventions by the CBN are part of broader efforts to stabilize the foreign exchange market and restore confidence in the Nigerian economy. These efforts include regulatory measures such as the revision of operations for International Money Transfer Operators (IMTOs), cancellation of cash payments for personal and business travels, and blocking of online platforms of crypto firms to curb illicit movement of funds.
Additionally, the EFCC has intensified its crackdown on illegal Bureau de Change operators and suspected currency racketeers across the country to deter currency speculation and promote transparency in the forex market.
