ADVERTISEMENT

Dollar supply rises by 180.59% to $440.13m as CBN moves to stabilise forex

The increase in dollar supply has been linked to the moves by the Central Bank of Nigeria to stabilise the foreign exchange rate which has recently been faced with diverse crises.

Dollar supply rises by 180.59% [Reuters]

The increase in dollar supply has been linked to the moves by the Central Bank of Nigeria to stabilise the foreign exchange rate which has recently been faced with diverse crises.

Before closing at ₦1435.53/$ on Friday, the naira traded at an intraday high of ₦1526/$ and low of ₦838.96/$ and has been fingered as the naira’s lowest drop in recent times.

Recall the CBN in a recent circular, had reinforced its resolve to stabilise the turbulent forex crisis in the country.

ADVERTISEMENT

The apex bank recently rolled out new circulars and guidelines to boost liquidity and narrow the gap between the parallel and official rates of the foreign exchange market.

In one of the circulars titled "Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks," the apex bank aimed at curbing banks’ forex speculation activities. With the move, the CBN stopped some commercial banks that are believed to be involved in buying or holding foreign currencies with the expectation of profiting from the fluctuating exchange rates.

The apex bank in another statement had also banned banks and financial technology companies otherwise known as fintechs, from operating International Money Transfer services (IMTOs).

A top bank source had revealed to The Punch that with the new circular, banks have been forced to sell about $5 billion worth of foreign currency.

According to the CBN circular, banks have been prohibited from holding excess dollar liquidity again and any foreign exchange being held by any deposit money bank must be tied to a transaction or an obligation that can be proven.

ADVERTISEMENT

It was also revealed that the idea behind the instruction for banks to sell off the excess dollars was to ensure more liquidity and also, to stabilise the exchange rate in order to make way for more foreign investors to come in.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Nigeria leads in 60% of Afreximbank's $30 billion energy sector financing

Nigeria leads in 60% of Afreximbank's $30 billion energy sector financing

Nigeria's foreign reserves appreciate to $33.5bn, highest in 4 months

Nigeria's foreign reserves appreciate to $33.5bn, highest in 4 months

Stanbic IBTC Pension Managers secures future with 'Make Extraordinary Happen' campaign

Stanbic IBTC Pension Managers secures future with 'Make Extraordinary Happen' campaign

10 African countries with the slowest internet speed at the start of 2024

10 African countries with the slowest internet speed at the start of 2024

CBN releases cyber security guidelines to manage tech services in banks

CBN releases cyber security guidelines to manage tech services in banks

10 AI-powered features of Smartcomply's cybersecurity platform

10 AI-powered features of Smartcomply's cybersecurity platform

CBN begins sales of dollars to Bureau de Change operators

CBN begins sales of dollars to Bureau de Change operators

A review of the 1win app: what makes this app stand out so much?

A review of the 1win app: what makes this app stand out so much?

Ridima, the best app to buy gift cards in Nigeria

Ridima, the best app to buy gift cards in Nigeria

ADVERTISEMENT
ADVERTISEMENT