For the first time since September, the Central Bank of Nigeria sold up to $86 million on Tuesday in the spot foreign exchange market.
This is the apex bank’s most recent effort to stabilize the naira in 2024, the third worst currency after Argentine Peso and Lebanese Pound.
The Central Bank of Nigeria sold the dollars for as little as N1,490/$1, with each bank earning between $2 million and $5 million.
The CBN called banks to bid freely and that it’s good for the market, instead of fixing rates.
In order to address a backlog in foreign demand that was eroding investor confidence in the central bank’s most recent currency reforms, the CBN had suspended dollar sales at the spot market.
According to sources, “this is just the first step, the next is to figure out a sales pattern, and then the exchange rate trajectory will start to change.”
Demand outstripped supply on Monday, causing the naira to drop to a record low of N1,534.39/$1 at the official foreign exchange market.
Additionally, the Central Bank of Nigeria was reminded to be focused on clearing the backlog entirely.
In an interview last month, Governor Olayemi Cardoso estimated that the CBN owed $2.2 billion in just forward contracts.
