By Kayode Ogunwale

The recent fluctuations in the foreign exchange market observed by the Central Bank of Nigeria (CBN) have been primarily attributed to increased demand from corporate entities and the anticipated seasonal surge during the summer period.

This insight, shared through an official circular issued by the apex bank and signed by Omolara Omotunde Duke, underscores the market forces at play.

As part of its response strategy, the CBN has committed to providing ongoing liquidity support across various segments of the official markets in the upcoming weeks. This proactive measure aims to stabilise the market and enhance liquidity levels.

Moreover, the CBN has initiated regular foreign exchange sales through Authorized Dealer Banks and licensed Bureaux De Change (BDCs) to alleviate the supply-demand imbalance in the foreign exchange market.

“In line with the above, the CBN on Thursday, July 18 and Friday, July 19, 2024, sold a total sum of US$106,500,000.00 (One Hundred and Six Million and Five Hundred Thousand US Dollars Only) to 29 (Twenty-Nine) Authorized Dealer banks between an exchange rate range of N1,498.00/US$1 to N1,530.00/US$1. In addition, it bought US$9,500,000 (Nine Million and Five Hundred Thousand Dollars) from 4 (Four) Authorized Dealer banks at rates between N1,510.00/US$1 and N1,550.00/US$1. The value date for all the transactions is July 19, 2024.”

In reinforcing its regulatory oversight, the CBN has emphasised the importance of authorised dealer banks’ adherence to existing trading regulations to uphold ethical standards and contribute to market stability. By closely monitoring compliance, the CBN aims to foster a transparent and orderly foreign exchange market environment in alignment with its price stability mandate.

The apex bank advised public to direct their foreign exchange demand to their banks and BDC operators in accordance with prevailing market regulations.