CBN takes action to boost FX market liquidity with a $122.67 million injection. Read about the expected outcomes of this decision.
The Central Bank of Nigeria (CBN) recently injected a total of US$122.67 million into the foreign exchange (FX) market in an effort to boost liquidity and stabilize the exchange rate. This intervention took place over two days and involved the sale of funds to 46 authorized dealers.
Dr. Omolara Duke, the director of financial markets at the CBN, disclosed that on July 10, 2024, the apex bank sold US$67.5 million to 27 authorized dealers at an exchange rate ranging from N1,480.00 to N1,500.00 per dollar.
Additionally, on July 11, 2024, the CBN sold US$55.17 million to 19 authorized dealers at a fixed rate of N1,540.00 per dollar.
The CBN specified that the injected funds are earmarked for trade-related transactions exclusively, with authorized dealers mandated to report such transactions within 72 hours.
The central bank emphasized its dedication to ensuring stability in the foreign exchange market through continuous interventions and vigilant monitoring of market activities.
This recent move by the CBN is part of its ongoing strategy to regulate the foreign exchange market and guarantee sufficient liquidity for importers and other authorized users.
The bank has stressed the significance of trade-based transactions for accessing foreign exchange and has implemented measures to deter speculative activities in the market.
While the intervention is anticipated to provide relief to importers and other FX users, the sustainability of the foreign exchange market in the long run will hinge on various factors such as government revenue, export earnings, and investor confidence.
