CBN offers $876m to forex markets

The Central Bank of Nigeria (CBN) has offered 876 million dollars to the foreign exchange (fx) markets to fulfil bids submitted by customers at an auction concluded on Wednesday.

This is contained in a statement issued by CBN’s Acting Director, Corporate Communications Department, Mrs. Hakama Sidi-Ali.

According to her, it is the latest testament to the apex bank’s commitment to support the FX market by enhancing liquidity when necessary.

“In line with its pledge to provide transparent access to foreign exchange for all legitimate customers, the CBN’s leadership has introduced an additional mechanism.

“This is through the Retail Dutch Auction System (RDAS) to directly facilitate FX sales to end users.

“This approach aims to foster a more transparent market, reduce information asymmetry, and support price discovery.

”It complements the two-way quote system deployed over the past few months to enhance liquidity in the interbank market.

“Through it, more than 305 million dollars of foreign exchange have been sold to authorised dealers in the last three weeks,” she said.

The director said that the CBN’s policy objectives were yielding tangible results and bolstering market confidence.

According to her, net foreign exchange flows rose to 25.4 billion dollars between January and June, marking a 55 percent year-over-year increase.

She said that this growth had been driven by a rise in capital importation, which reached six billion dollars in June, and record inflows from diaspora remittances through formal channels.

“The foreign exchange market is also showing signs of improvement and increased depth, with more robust and diversified sources of liquidity contributing to the sustained convergence of exchange rates across all segments of the market.

“The official market recorded a turnover of 43 billion dollars in customer transactions by the end of July, with CBN-supplied liquidity representing less than five percent of total market activities.

“The CBN remains steadfast in its commitment to fostering a transparent, market-driven foreign exchange market.

“It will also continue to strengthen the market’s capacity to meet the needs of all legitimate participants,” she said.