UPDATED: $543.5m FX sold to authorised banks in 11 days – CBN

The Central Bank of Nigeria has disclosed that it sold a total sum of $543.5m at the rate of N1,540 and N1,580 to authorised dealers banks between September 6 and September 30, 2024.

This amount is the equivalent of N844.92bn in naira.

The CBN disclosed this in a statement signed by the Director, Financial Markets Department, Omolara Duke, on Friday in Abuja.

Duke stated that the sale was conducted via two-way quotes in the Nigerian Foreign Exchange Market with the aim of reducing observed market volatility driven by high demand for commodity importation and seasonal demand for FX.
She explained that the amount was sold to an average of 26 authorised dealer banks within 11 trading days.

Despite these sales, the naira only appreciated by 2.77 per cent to N1,541 at the official market but hit its lowest point in September closing at N1,700 per dollar at the parallel market.

The statement read, “The Central Bank of Nigeria sold a total of US$543.5m from September 06-30, 2024, to Authorized Dealer banks through two-way quotes at the Nigerian Foreign Exchange Market on 11 dealing days.
“The FX spot sales were to reduce observed market volatility driven by high demand for commodity importation and seasonal demand for FX. The value dates for all the transactions were T+2.”

The CBN director added that the release is to educate and provide guidance to the general public on the pricing of FX and the range of rates it sold to banks within the period.

“This press release is to educate and provide guidance to the general public on the pricing of FX by taking a clue from the range of rates at which FX was sold by the CBN to Authorised Dealer Banks.

“The CBN will continue to facilitate the supply of FX into the Nigerian Foreign Exchange Market as part of its holistic FX Management strategy,” the statement concluded.
The declining value of the naira has raised concerns among Nigerians, as it serves as a benchmark for the prices of essential goods in the country. Since Olayemi Cardoso became CBN Governor, the local currency has lost more than half its value in just one year.

However, the governor has maintained that the bank has performed its best to strengthen the value of the naira at the exchange rate market.

At the last Monetary Policy Meeting, Cardoso alluded to a correlation between the monthly disbursement from the Federation Account Allocation Committee and FX demand pressures.
He noted that going forward the bank will monitor future disbursement by the FAAC to determine its impact on prices.

Checks by our correspondent showed that Foreign reserves increased by almost 5 per cent in September rising from $36.24bn at the beginning of the month to $38.058bn by September 30th, 2024.

A breakdown of the amount sold on each trading day showed that the bank sold $39m on September 6 between the range rate of N1,580 -N1,605 to 26 banks.

On September 9, it sold $66m at range rates of N1,570 – N1,585 to 23 banks. By September 11, the amount sold increased to $77m at the rate of N1,540-N1,575 to 31 banks.

The CBN also sold $46m on September 13 at the range rate of N1,540 and N1,575 to 23 banks. Five days later, the amount sold was reduced to $24m at the rate of N1,530-N1,540 to 12 authorised banks.

On September 19, it sold $28m at the rate of N1,540-N1,555 to 14 banks, while it disbursed $31m to 14 banks at the range rate of N1,540 and N1,545 on September 20.

On September 23, the CBN distributed $17.5m at the rate of N1,540 to 10 banks. The amount increased to $80m on September 26, $79m on the following date and $56m on September 30 between the range rate of N1,530 and N1,580.