The Central Bank of Nigeria (CBN) on Wednesday offered $876million to meet the bids submitted by customers at the foreign exchange market, just as it pledged commitment to continue to support the liquidity of the market.
The auction on Wednesday was in line with the apex Bank’s pledge to provide transparent access to foreign exchange for all legitimate customers as part of its resolve to support the proper functioning of the foreign exchange market by enhancing liquidity when necessary.
To achieve this objective, the CBN introduced an additional mechanism through the Retail Dutch Auction System (RDAS) to directly facilitate FX sales to end users.
This approach, the apax bank explained in The statement, was aimed at fostering a more transparent market, reducing information asymmetry and supporting price discovery.
“It complements the two-way quote system deployed over the past few months to enhance liquidity in the interbank market, through which over $305 million of foreign exchange has been sold to authorised dealers in the last three weeks,” spokesperson of the CBN, Hakama Sidi-Ali said on Wednesday.
The CBN’s policy objectives, she said, wre yielding tangible results and bolstering market confidence,with net foreign exchange flows rising to $25.4 billion between January and June, marking a 55% year-over-year increase.
She said the growth has been driven by a rise in capital importation, which reached $6 billion in June 2024, and recorded inflows from diaspora remittances through formal channels.
The foreign exchange market, she added, was 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 in customer transactions by the end of July 2024, with CBN-supplied liquidity representing less than 5% of total market activities.
“The CBN remains steadfast in its commitment to fostering a transparent, market-driven foreign exchange market, and it will continue to strengthen the market’s capacity to meet the needs of all legitimate participants,” Sidi-Ali added.
