CBN Sells $61m to Banks to Defend Naira
The Central Bank of Nigeria (CBN) conducted foreign exchange market intervention sales on Thursday to defend the naira further. The Apex Bank sold $61 million to authorised dealer banks as part of its renewed FX intervention to boost liquidity in the currency market.
Hence, the naira gained N13 to close at N1,532 per US dollar in the official market. FX auction details showed that CBN sold $61.1 million to banks between the rates of N1,515 and N1,545 per US dollar.
Earlier in the week, the authority sold $28.5 million to boost FX liquidity and keep the naira on the advantage side in the currency market. The naira’s price discovery process has benefited recently from increased transparency and robust liquidity in the foreign exchange markets.
The naira saw an all-round gain across the foreign exchange market against the US dollar due to sufficient foreign currency supply. This week, gross external reserves crossed $40.42 billion amidst inflows from foreign portfolio investors and other sources.
Oil sales remain a major driver of Nigeria’s foreign receipt. Nigerian production of crude oil and condensates rose in November by 13.3% compared to the 1.5 million bpd output in the same month of 2023, according to data from the monthly output report by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Analysts believe the external reserves, in addition to $2.2 billion raised from the Eurobond market, would be sufficient to back the naira as CBN continues to look for various alternatives to keep the local currency stable.
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