The Central Bank of Nigeria (CBN) injected $543.5 million into the foreign exchange market in September to address currency volatility driven by high demand for imports and seasonal factors.
Bollywoodfever: The Central Bank of Nigeria (CBN) has injected $543.5 million into the Nigerian foreign exchange market between September 6 and 30, 2024, in an effort to stabilize the naira and address currency volatility. The injection comes as Nigeria grapples with severe foreign exchange shortages, driven by heightened demand for imports and seasonal factors.
Omolara Duke, CBN’s Director of Financial Markets, revealed that the bank sold foreign currency to authorized dealers 11 times over the period, with exchange rates ranging from NGN1,530 to NGN1,605 per dollar. The largest sale occurred on September 26, when $80 million was injected into the market, while the smallest sale was $17.5 million on September 23.
Duke stated that the spot forex sales aimed to reduce market volatility, noting that the bank will continue to facilitate the supply of FX as part of its holistic FX Management strategy. These actions are part of broader government measures to counter ongoing currency depreciation, which has seen the naira lose more than 60% of its value in 2024.
To manage the foreign exchange crisis, the Nigerian government has restricted foreign currency withdrawals and considered selling oil in local currency, though reports suggest that disagreements over pricing have delayed the plan’s implementation. Additionally, the government has tightened regulations on global cryptocurrency exchanges and cracked down on illegal currency dealers, though these efforts have yet to stabilize the naira.
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