In its recent effort to support the proper functioning of the foreign exchange market by enhancing liquidity when necessary, the Central Bank of Nigeria CBN offered $876m to fulfil bids submitted by customers at an auction in Abuja.
In a statement, the CBN says, to provide transparent access to foreign exchange for all legitimate customers, the apex bank management has introduced an additional mechanism through the Retail Dutch Auction System, RDAS, to directly facilitate forex sales to end users.
It explains that the approach aims to foster a more transparent market thereby reducing information asymmetry and supporting price discovery, which 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.
The statement notes that The CBN’s policy objectives are yielding tangible results and bolstering market confidence as indicated in the rise of Net foreign exchange flows to $25.4 billion between January and June, marking a 55% year-over-year increase.
It stresses that this growth has been driven by a rise in capital importation, which reached $6 billion in June 2024, and record inflows from diaspora remittances through formal channels.
The foreign exchange market is 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, with the official market recording a turnover of $43 billion in customer transactions by the end of July 2024 and the CBN-supplied liquidity representing less than 5% of total market activities.
The CBN, therefore, restates its steadfastness in its commitment to fostering a transparent, market-driven foreign exchange market by continuing to strengthen the market’s capacity to meet the needs of all legitimate participants.
PR/Umbwanko Baba
-
DayBreak on Kapital Show
With Ife and Bendodo
Welcome to our extraordinary breakfast show, where the sun has just begun to peek over the horizon, and the world is ripe with endless possibilities. From the early hours of 5AM to 10AM on weekdays, we invite you to indulge in a symphony of captivating content that will set the perfect tone for your day.
close Top popular
Post comments (0)