The Central Bank of Nigeria has over $300m to Deposit Money Banks in the last two weeks amid desperate efforts to stabilise the naira-dollar exchange rate.
The Association
of Corporate Treasurers of Nigeria made the disclosure in an advisory memo made
available to its members.
The memo read
in part, “We are sure you must have been following up on activities in the
foreign exchange market, with rates at the official market going as high as
N1850/$.
“If you are not
aware, kindly note that the CBN last week sold over $200m to the banks below
N1,500/dollar. Similarly, this week, the
CBN has on two consecutive days sold FX to banks at rates we understand to be
in the $1,450 range. We hope this information helps guide your decisions
regarding the rates and spreads you get from your banks.”
Confirming the
development to The PUNCH, an executive committee member of the ACTN, who
pleaded anonymity, said the memo was sent to ACTN members to help guide in
decision-making amid the dramatic fall in the value of the naira.
He said,
“Everything in the memo is correct. The information is from the CBN. We just
wanted to keep our members informed on what is happening.”
The dollar
sales came on the heels of rapid depreciation of the naira in recent weeks. As
of January 1, 2024, the naira began the year at N891/$, but has since taken
multiple beatings at the official Nigeria Autonomous Foreign Exchange Market
and parallel markets.
However, the
local currency appreciated against the United States dollar at the parallel
market last Thursday and Friday after
the CBN in collaboration with the Economic and Financial Crimes Commission
raided currency traders on the streets of Abuja. The currency traders were
believed to be speculating against the local currency. The local currency also firmed up at the
official market.
Meanwhile, the
naira appreciated against the dollar to 1,582/$ at the close of trading
activities at the official market on Monday.
According to
data obtained from FMDQ securities, the increase was N12 or 0.75 per cent from
N1,594 recorded at NAFEM on Friday.
At the black
market, the naira slipped slightly to between N1,555/dollar and N1,560/dollar,
following market sentiment.
The local
currency, which peaked at a lowest of 1,900/dollar on Thursday rebounded to
1,500/dollar on Friday, following EFCC raids on currency speculators.
However, the
local currency depreciated slightly against the dollar at N1,555/$ on Monday
evening, according to data collated from
some street traders.
The rise in
naira value was due to market sentiment as the EFCC continued to clamp down on
black market operators across Abuja and Lagos.
Last week,
operatives of the Economic and Financial Crimes Commission arrested over 250
BDC operators at the popular Wuse Zone 4 market. That street was however
completely deserted when our correspondent visited on Monday afternoon.
Upon enquiries,
it was gathered that sales were conducted at the offices of the currency
traders as stipulated by the CBN.
Earlier in
February and in a pushback, the CBN initiated various moves to stem the tide of
the naira.
On February 4,
2024, the CBN revised operations for International Money Transfer Operators,
restricting their services to inbound transfers with mandatory naira payouts.
The move has
had a profound effect on the activities of major IMTOs, including Western Union
and MoneyGram, and is among several measures aimed at stabilising the foreign
exchange market.
Last Wednesday,
the CBN in a circular addressed to all banks, cancelled cash payments for
Personal and Business Travels
To promote
transparency and accountability in the forex market, the CBN directed all banks
to process the allowances through electronic channels.
The CBN urged
all authorised dealers and the public to adhere to the new directive promptly
to facilitate a seamless transition to electronic payouts.
Last week, the
Federal Government said it was working on raising $10bn to improve liquidity in
the foreign exchange market.
Also, to
checkmate the illicit movement of funds, the Federal Government reportedly
blocked the online platforms of Binance and other crypto firms.
It was learnt
the move was aimed checking the alleged manipulation of the forex market.
Other platforms
like Forextime, OctaFX, Crypto, FXTM, Coinbase, were also blocked.
To clamp down
on currency racketeering, the EFCC has been some illegal Bureau de Change
operators in different parts of the country, following the reports of engaging
in currency speculation.
Last Wednesday,
operatives of the Enugu Zonal Command EFCC alongside other security agencies,
said it arrested 115 suspected currency racketeers in the state.