CBN Sells S61m to Banks to Strengthen Naira’s Position
The Central Bank of Nigeria (CBN) intervened in the foreign exchange market on Thursday, selling $61 million to authorised dealer banks to support the naira. The move is part of the bank’s ongoing efforts to defend the naira and enhance liquidity in the currency market.
As a result of the intervention, the naira gained N13, closing at N1,532 per US dollar in the official market. According to FX auction details, the CBN sold $61.1 million at rates between N1,515 and N1,545 per US dollar.
Earlier in the week, the CBN had sold $28.5 million to bolster FX liquidity and stabilise the naira. This intervention is aimed at providing a boost to the naira’s price discovery process, benefiting from increased transparency and robust liquidity in the foreign exchange markets.
Oil and Reserves Boosting Stability
The naira’s appreciation was further supported by the inflow of foreign currency, with Nigeria’s gross external reserves surpassing $40.42 billion this week, driven by foreign portfolio investments and oil revenue. Nigeria’s crude oil production in November rose by 13.3%, reaching 1.7 million bpd, compared to the 1.5 million bpd output in November 2023, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Analysts believe that the combination of increased external reserves and $2.2 billion raised from the Eurobond market will provide sufficient support for the naira, as the CBN continues to explore alternative methods to ensure currency stability.
