The Central Bank of Nigeria (CBN) took its latest step towards stabilising the naira after selling almost $90 million in the spot FX market on Tuesday, its first sale of dollars in the market since September 2023.

Sources familiar with the matter told BusinessDay that the CBN sold the dollars at a rate as low as N1490 per dollar, with more than half of the 34 banks that bidded securing between $2-5 million.

The sale is aimed at improving dollar liquidity in the market and breathing life into one of the world’s worst-performing currencies this year.

“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.

The apex bank’s intervention in the spot market has been a long time coming. The CBN had said it would intervene in the market from “time to time” as far back as October 12, 2023.

“As market liquidity improves, these CBN interventions will gradually decrease,” the apex bank said in a circular dated October 12.

The latest intervention by the CBN however pales in comparison to the average of $25 million it sold daily in the market last year.

“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 its interventions.

“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 gained on Tuesday to N1499/$, according to data by FMDQ Securities Exchange, which calculates the rates. That’s up from Monday’s record-low of N1,534.39 per dollar.

The CBN’s intervention in the market is the latest in a long list of moves aimed at boosting liquidity in the FX market and holding the rates in the official and black market from flying apart like they did after the naira was first allowed to trade freely against the dollar last June.

The Abuja-based bank has introduced better transparency around pricing in the official market, asked banks to offload excess dollars and removed the cap on transactions done by International Money Transfer Operators (IMTO)s to lure in diaspora dollars.

The CBN has however been urged not to lose sight of fully clearing the backlog if it wants to fully restore investor confidence in the market. Governor Olayemi Cardoso put the dollars owed by the CBN in forward contracts alone at $2.2 billion in an interview this month.

“Settling the CBN’s overdue dollar obligations will help rebuild confidence in the central bank and the naira,” one investor said.

“Sharing comprehensive information on Nigeria’s reserves position would facilitate a more complete assessment of the external situation,” the investor added.

Nigeria’s external reserves data has been viewed with suspicion since US-based JP Morgan’s shocking revelation that the CBN only holds about 10 percent of what it claims to have in net external reserves. JP Morgan is the Nigerian government’s foreign banker.

The International Monetary Fund (IMF) this week projected that Nigeria’s foreign reserves may see a record fall to $24 billion in 2024.

The CBN denied the JP Morgan report, but its struggle to clear the dollar backlog owed to investors and businesses raises questions about whether it does have the $33 billion in external reserves that it claims.

https://www.google.com/amp/s/businessday.ng/news/article/cbn-sells-dollars-at-spot-market-for-first-time-in-5-months/%3famp=1

Upon all the dollars the CBN is pumping into the market through the banks the naira keep sliding

Let me say something.

If you have ever gone into CBN and see the way the staff are working and the kind of people there, you will know Nigeria’s problem is deeper than you think.

When you have a sensitive system occupied by incompetent people, people who got the job through slots and nepotism.
Enter cbn office and see their staff watching movies on their laptops, doing little or nothing other than occupying space and earning salaries.

How do you expect such system to function

Warevaaaa. We hear how Wigwe and co are given dollars by CBN and how that’s how they all got rich

CBN sells to Banks @ 1,490 Naira? And the Banks will sell to the BDC operators @ 1,690 Naira; BDC will sell to the general public @ 1,890 Naira, and the cycle continues.

Until the Black Market is scrapped, trust me, this is an exercise in futility.

CBN selling at 1490, how much then will the banks sell it ?

kk

If you sell @ 1490 to the banks , how much do you think they will resell

Can’t we use dollar for only online transactions in this country and any other fiat payment is through naira

Dorm acct should be phase off as well

The last kick of a dying horse...
Confused bunch of corrupt politicians...

A sound economist would have known what to do not all these trial & error these people are doing to our economy.

Ok. But as at yesterday, nothing has changed. This is where their wicked policy has hit me so hard. I will survive it

Awon oni ranu

Won ti paa Naija si ara

Incase you need this full video attached below
Whatsap me 0 80 8 5 310 35 nine


Awon Ojelu

After Politician Banker remain the biggest scammers in the world

Nonsense! Tinubu and his Geng of Lagos Boys have nothing to offer Nigeria except hardship and leadership by propaganda and Trial & Error.

If not that Nigeria is a failed state, tell me how and where else on earth can someone with Tnubu's character, history and description be qualified to be a village chief let alone to be president of the most populous black nation of over 200 million people. Tell me how.

Low rate of N1490, so we're never going to see a less than a thousand rate to the dollar anymore😭😭😭

ok we are getting there before the 4years is over it will be 5000

Let the masses breath, is too much to demand?




Tinubu, a bad man with good intentions.

The USD will be 800 NGN this year and I forsee the current inflation reduced by 20%

Ok...

Hmmm

Tinubu will handle the economy,
Shettima will handle the security

My westside G'z Holla.. Ebi n pawa ooo!

Nigerian commercial banks are very very useless...
Na Dem gangan dey sabotage the economy.
Approved, legalized and constitutionalised armed robber without any visible weapon.
They very very useless
Baba Alajo better pass them

Obi is a fraud
Will never rule this zoo

Looking and laughing at them now .

Will it change anything?🤷🏿‍♂️

sukkot:
Warevaaaa. We hear how Wigwe and co are given dollars by CBN and how that’s how they all got rich

Tell me one rich man in Nigeria whose hands are not tainted with corruption.

If CBN is selling at ₦1,490 then we should be expecting the banks to be selling at ₦1,550 and above. The black market will be worst as they will sell between ₦1,600 and ₦1,800.

What is making me to get worried most is the floating of naira which is not really working. Our local products that is supposed to sell at lower price are competing with imported products which is at higher price.

A lot of reformation needs to be done in this country.

Gf

Nigeria has fallen!

nlfpmod:


https://www.google.com/amp/s/businessday.ng/news/article/cbn-sells-dollars-at-spot-market-for-first-time-in-5-months/%3famp=1

I hope no be paid paid sell oo.

At what rate.

Omoawoke:
Let me say something.

If you have ever gone into CBN and see the way the staff are working and the kind of people there, you will know Nigeria’s problem is deeper than you think.

When you have a sensitive system occupied by incompetent people, people who got the job through slots and nepotism.
Enter cbn office and see their staff watching movies in their laptops, doing little or nothing other than occupying space and earning salaries.

How do you expect such system to function

That's the problem we have. Have you heard of the prayer small work, big pay (ise kekere, owo nla)?
That's the selfish prayer and selfish mentality of Nigeria.
We need restart botton!