Nigeria’s central bank announced on Tuesday that it had conducted a sale of $15.83 million to exchange bureaus at a more favorable naira rate compared to the official market. This marks the second such sale in April and the fourth for the year, part of the bank’s efforts to enhance the availability of foreign currency.
At 1326 GMT, the official market priced the naira currency at 1,315 per dollar, according to data from LSEG.
The central bank distributed $10,000 each to 1,583 currency exchange operators at a rate of 1,021 naira per dollar, catering to the demand for eligible end-user foreign exchange requirements. These operators were instructed to resell at a markup not exceeding 1.5% above the purchase price.
This approach aims to infuse liquidity into the market while managing the naira exchange rate, which had reached a record low in February but is now showing signs of strengthening.
Both the official and parallel markets have witnessed a notable surge in the naira against the dollar following the central bank’s decision to raise interest rates and remove restrictions on foreign participation in its fixed-income auctions.
In response, the bank has initiated a cycle of rate tightening and boosted yields on short-term treasury bills to attract foreign investors.
Governor of the Central Bank, Olayemi Cardoso, emphasized that the institution’s goal isn’t to artificially support the currency. He clarified that the recent decline of approximately $2 billion in reserves over the past two months is unrelated to defending the currency.
