Central Bank of Nigeria Intervened in Nigerian FX Market by Injecting USD543.5M. CBN’s Determination Brings Hope to Beleaguered Naira

As it can be figured out from the recent operation statement, to mitigate currency volatility, the Central Bank of Nigeria (CBN) intervened in the Nigerian foreign exchange market by injecting $543.5 million between September 6th and 30th. The bank identified elevated demand for imports and seasonal influences as contributing factors to this volatility. In light of ongoing foreign exchange shortages, the government has implemented various measures, such as limiting foreign currency withdrawals and contemplating the sale of oil in local currency.

During the period from September 6 to 30, the CBN sold $543.5 million to authorized dealers to stabilize the nation’s increasingly fluctuating currency. According to a statement by Omolara Duke, the bank’s director of financial markets, foreign currency was sold on 11 separate cases at exchange rates that varied from NGN1,530 to NGN1,605 per dollar.

Duke reported that on September 26, the CBN infused the highest amount of foreign currency into the market, selling $80 million. Conversely, three days prior, the bank recorded its lowest dollar sales for the month, amounting to $17.5 million. Determination, with which CBN defends NGN, offers Fx traders more reason to become bullish on the Nigerian currency, the country where inflation remains manageable in the medium run.