CBN Boosts Forex Reserves with $300 Million Sale to Banks as Naira Gains

In a bid to stabilize the naira-dollar exchange rate, the Central Bank of Nigeria (CBN) has successfully sold over $300 million to Deposit Money Banks (DMBs) in the last two weeks, according to an advisory memo from the Association of Corporate Treasurers of Nigeria.

The memo, as seen by SK Blog, revealed that the CBN sold over $200 million to banks below N1,500/dollar last week and continued to sell foreign exchange at rates around $1,450 this week. The move comes amidst concerns about the naira’s recent depreciation, with rates reaching as high as N1850/$ at the official market.

Confirming the development, an anonymous executive committee member of the ACTN stated, “Everything in the memo is correct. The information is from the CBN. We just wanted to kee our members informed on what is happening.”

The naira, which began the year at N891/$, experienced significant depreciation in recent weeks. However, following joint efforts by the CBN and the Economic and Financial Crimes Commission to curb speculation, the local currency appreciated against the US dollar at the parallel market and firmed up at the official market.

As of Monday, the naira closed at 1,582/$ in the official market, experiencing a slight dip at the parallel market to between N1,555/dollar and N1,560/dollar. The market sentiment, influenced by EFCC raids on currency speculators, played a key role in the fluctuation.

In related moves, the CBN implemented measures such as revising operations for International Money Transfer Operators and cancelling cash payments for Personal and Business Travels. These measures, along with the government’s efforts to raise $10 billion for improved liquidity in the forex market, aim to stabilize and strengthen the Nigerian economy.

Additionally, the Federal Government’s crackdown on illicit movement of funds led to the blocking of online platforms of crypto firms like Binance, Forextime, OctaFX, and Coinbase, as part of efforts to curb alleged forex market manipulation.

Meanwhile, the EFCC continues to intensify efforts against illegal Bureau de Change operators engaged in currency racketeering, with recent arrests reported in different parts of the country. Last week, 115 suspected currency racketeers were apprehended by operatives of the Enugu Zonal Command EFCC alongside other security agencies.