The Central Bank of Nigeria (CBN) sold up to $30 million in the spot FX market on Tuesday morning, its first sale of dollars in the market since September 2023.
It is the apex bank’s latest attempt to stabilise the naira, one of the world’s worst-performing currencies, in 2024.
Sources familiar with the matter told BusinessDay that the CBN sold the dollars at a rate as low as N1490 per dollar, with each bank securing between $2-5 million.
“Rather than fix rates, the CBN called banks to bid freely, and that’s good for the market,” a source told BusinessDay.
The CBN had frozen dollar sales at the spot market in order to deal with a foreign exchange demand backlog that was undermining investor confidence in the apex bank’s latest currency reforms.
“CBN being back in the market is highly commendable, as its presence will boost trading liquidity,” another source familiar with the matter said.
Analysts, however, say the CBN needs to conduct the sale professionally and consistently in order to reap the full gains of the latest move.
“This is step one; the next step is to establish a pattern for the sales, and then the exchange rate trajectory will begin to change,” one of the sources said.
The naira on Monday fell to a record low of 1,534.39 per dollar at the official foreign exchange market as demand trumped supply.
The CBN was also urged not to lose sight of completely clearing the backlog. Governor Olayemi Cardoso put the dollars owed by the CBN in forward contracts alone at $2.2 billion in an interview this month.
